A company sells equipment which originally cost $150,000 for $50,000 on December 31, 2019. The Accumulated Depreciation account had a balance of $60,000 after the current year's depreciation of $15,000 had been recorded. The company should a recognize a $40, 000 loss on disposal O $40,000 gain on disposal O $25,000 loss on disposal O $100,000 loss on disposal

A company sells equipment which originally cost $150,000 for $50,000 on December 31, 2019. The Accumulated Depreciation account had a balance of $60,000 after the current year's depreciation of $15,000 had been recorded. The company should a recognize a $40, 000 loss on disposal O $40,000 gain on disposal O $25,000 loss on disposal O $100,000 loss on disposal

Name: A company sells equipment which originally cost $150,000 for $50,000
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Description: A company sells equipment which originally cost $150,000 for $50,000 on December 31, 2019. TheAccumulated Depreciation account had a balance of $60,000 after the current year's depreciationof $15,000 had been recorded. The company should a recognize

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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 equipment which originally cost $150,000 for $50,000 on December 31, 2019. The
Accumulated Depreciation account had a balance of $60,000 after the current year's depreciation
of $15,000 had been recorded. The company should a recognize a
O $40, 000 loss on disposal
O $40,000 gain on disposal
O $25,000 loss on disposal
O $100,000 Iloss on disposal
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