On December 31, 2015, Cee Corp.sells an asset that originally cost $300,000 for $75,000.The accumulated depreciation account has a balance of $200,000 after the current year's depreciation of $15,000 had been recorded.The company should recognize a gain or loss on disposal of
A)$ 25,000 gain.
B)$ 25,000 loss.
C)$125,000 gain.
D)$125,000 loss.

Question

Quizplus · Accepted Answer

The book value of the asset can be calculated as:
Book value = Cost - Accumulated depreciation
Book value = $300,000 - ($200,000 + $15,000) = $85,000

Since the asset was sold for $75,000, there is a loss on disposal of:
Loss on disposal = Selling price - Book value
Loss on disposal = $75,000 - $85,000 = $10,000

Therefore, the correct answer is B) $25,000 loss.