A company sells a plant asset that originally cost $375,000 for $125,000 on December 31, 2022.The accumulated depreciation account had a balance of $150,000 after the current year's depreciation of $37,500 had been recorded.The company should recognize a
A)$250,000 loss on disposal.
B)$100,000 gain on disposal.
C)$100,000 loss on disposal.
D)$62,500 loss on disposal.

Question

Quizplus · Accepted Answer

The book value of the asset is $225,000 ($375,000 cost - $150,000 accumulated depreciation). Selling it for $125,000 results in a $100,000 loss ($225,000 - $125,000).

A Company Sells a Plant Asset That Originally Cost $375,000