A company sells a plant asset that originally cost $225,000 for $75,000 on December 31, 2014. The accumulated depreciation account had a balance of $90,000 after the current year's depreciation of $22,500 had been recorded. The company should recognize a
A) $150,000 loss on disposal.
B) $60,000 gain on disposal.
C) $60,000 loss on disposal.
D) $37,500 loss on disposal.

Question

Quizplus · Accepted Answer

The book value of the asset is $135,000 ($225,000 cost - $90,000 accumulated depreciation). Selling it for $75,000 results in a $60,000 loss ($135,000 - $75,000).

A Company Sells a Plant Asset That Originally Cost $225,000