A company sells a plant asset that originally cost $400000 for $170000 on December 31, 2022. The accumulated depreciation account had a balance of $160000 after the current year's depreciation of $40000 had been recorded. The company should recognize a O $30000 loss on disposal. O $70000 gain on disposal. O $230000 loss on disposal. O $70000 loss on disposal.

A company sells a plant asset that originally cost $400000 for $170000 on December 31, 2022. The accumulated depreciation account had a balance of $160000 after the current year's depreciation of $40000 had been recorded. The company should recognize a O $30000 loss on disposal. O $70000 gain on disposal. O $230000 loss on disposal. O $70000 loss on disposal.

Name: A company sells a plant asset that originally cost $400000 for $17000
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Description: A company sells a plant asset that originally cost $400000 for $170000 on December 31, 2022. The accumulated depreciationaccount had a balance of $160000 after the current year's depreciation of $40000 had been recorded. The company shouldrecognize

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

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

A company sells a plant asset that originally cost $400000 for $170000 on December 31, 2022. The accumulated depreciation
account had a balance of $160000 after the current year's depreciation of $40000 had been recorded. The company should
recognize a
O $30000 loss on disposal.
O $70000 gain on disposal.
O $230000 loss on disposal.
O $70000 loss on disposal.

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