A fixed asset with a cost of $30,000 and accumulated depreciation of $25,000 is sold for $3,500.What is the amount of the gain or loss on disposal of the fixed asset?
A)$2,500 loss
B)$1,500 loss
C)$2,500 gain
D)$1,500 gain

Question

Quizplus · Accepted Answer

The amount of gain or loss on disposal of a fixed asset is calculated as follows:

Selling Price - Book Value

Book value is the cost of the asset minus accumulated depreciation. In this case, book value would be:

$30,000 - $25,000 = $5,000

Therefore, the amount of gain or loss on disposal would be:

$3,500 - $5,000 = -$1,500

Since the result is negative, it is a loss. Hence, the answer is B) $1,500 loss.

A Fixed Asset with a Cost of $30,000 and Accumulated