D sold a depreciable asset for 40000 It was the only asset i

D sold a depreciable asset for $40,000. It was the only asset in the capital cost allowance class. The undepreciated capital cost was $55,000 at the time of the sale. The asset cost $60,000 when it was purchased. What is the amount of the loss to be reported in net income for tax purposes?

Please show me the explaination

Solution

Amount of loss on asset=Carrying value of asset(i.e. undepreciated capital cost)-Sales value

=$55000-$40000=$15000.