An asset that costs 38000 and has accumulated depreciation o

An asset that costs $38,000 and has accumulated depreciation of $12,600 is sold for $20,700. What amount of gain or loss will be recognized when the asset is sold? Multiple Choice

A gain of $4,700.

A loss of $4,700.

A loss of $17,300.

A gain of $17,300.

Solution

Answer:

A loss of $4,700.

Working notes for the above answer is as under

Cost of assets

38000

less: accumulated depreciation

12,600

Book value

25,400

Less: Sales value

20700

A loss of

4,700

Sales value is less the book value of the assets so here loss will be recognized when the asset is sold