Question

A plant asset with a cost of $600000 and accumulated depreciation of $570000 is sold for $70000. what is the amount of the gain or loss on disposal of the plant asset?

Answer 1

Plant asset with a cost of $600,000
Accumulated depreciation of $570,000 Sold for $70,000

To solve:
Amount gained/lost = (accumulated depreciation - plant asset cost) + sale price
Amount gained/lost = ($570,000 - $600,000) + $70,000
Amount gained/lost = -$30,000 + $70,000
Amount gained = $40,000