A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,000, the recognized loss on the trade is
A) $3,000
B) $4,500
C) $500
D) $1,500

Question

Quizplus · Accepted Answer

The recognized loss on the trade is $1,500. This is calculated as follows:Trade-in allowance - Book value = Recognized loss$3,000 - ($41,000 - $36,500) = $1,500

A Fixed Asset with a Cost of $41,000 and Accumulated