Answered

Welcome to Westonci.ca, where finding answers to your questions is made simple by our community of experts. Connect with a community of experts ready to provide precise solutions to your questions quickly and accurately. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Martinez owns an asset that cost $87,000 with accumulated depreciation of $40,000. The company sells the equipment for cash of $42,000. At the time of sale, the company should record:

Sagot :

abiolataiwo2015

Answer:

A loss on sale of $5,000

Explanation:

Calculation to determine what the company should record at the time of sales

First step is to calculate the Book value as on date of sale using this formula

Book value as on date of sale=Cost-Accumulated depreciation

Let plug in the formula

Book value as on date of sale=87,000-40,000

Book value as on date of sale=$47,000

Based on the above calculation the sale proceeds is lower than the book value as on date of sale which indicate a loss

Hence:

Loss =($47,000-$42,000)

Loss=$5000

Therefore At the time of sale, the company should record: A loss on sale of $5,000.

Thank you for your visit. We are dedicated to helping you find the information you need, whenever you need it. We hope this was helpful. Please come back whenever you need more information or answers to your queries. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.