A company discarded a computer system originally purchased for $8,750. The accumulated depreciation was $6,450. The company should recognize a (an): Multiple Choice $0 gain or los. $2,300 loss. $2,300 gain. $8,750 gain. $6,450 loss.

A company discarded a computer system originally purchased for $8,750. The accumulated depreciation was $6,450. The company should recognize a (an): Multiple Choice $0 gain or los. $2,300 loss. $2,300 gain. $8,750 gain. $6,450 loss.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

A company discarded a computer system originally purchased for $8,750. The accumulated depreciation was $6,450. The company should recognize a (an):
Multiple Choice
$0 gain or loss.
$2,300 lo
$2,300 gain.
$8,750 gain.
$6,450 loss.

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