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10 September, 22:11

An asset that costs $14,400 and has accumulated depreciation of $8,000 is sold for $5,600. What amount of gain or loss will be recognized when the asset is sold?

A) A gain of $2,400.

B) A loss of $2,400.

C) A loss of $800.

D) A gain of $800.

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Answers (1)
  1. 10 September, 23:32
    0
    C. Loss of $800

    Explanation:

    Given that

    Purchase price = 14400

    Depreciation = 8000

    Selling price = 5600

    Thus,

    Value of asset after depreciation = Purchase price - Depreciation

    = 14400 - 8000

    = 6400.

    Therefore,

    Difference between current value and price sold = value of asset after depreciation - selling price

    = 6400 - 5600

    = 800

    Therefore, there was a loss of $800, since the selling price is less than the value of asset after depreciation.
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Home » Business » An asset that costs $14,400 and has accumulated depreciation of $8,000 is sold for $5,600. What amount of gain or loss will be recognized when the asset is sold? A) A gain of $2,400. B) A loss of $2,400. C) A loss of $800. D) A gain of $800.
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