An asset\'s book value is $18,000 on December 31, Year 5. The asset has been dep

Question

An asset's book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: 1.Neither a gain nor a loss is recognized on this transaction. 2.A loss on sale of $12,000. 3.A gain on sale of $12,000. 4.A loss on sale of $3,000. 5.A gain on sale of $3,000. An asset's book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: 1.Neither a gain nor a loss is recognized on this transaction. 2.A loss on sale of $12,000. 3.A gain on sale of $12,000. 4.A loss on sale of $3,000. 5.A gain on sale of $3,000. An asset's book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: 1.Neither a gain nor a loss is recognized on this transaction. 2.A loss on sale of $12,000. 3.A gain on sale of $12,000. 4.A loss on sale of $3,000. 5.A gain on sale of $3,000.

Explanation / Answer

An asset's book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record:

the product at same date of book value 18000

so 18000-15000 = 3000 loss on sale

answer is

4.A loss on sale of $3,000.

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