An asset\'s book value is $19,100 on December 31, Year 5. The asset has been dep

Question

An asset's book value is $19,100 on December 31, Year 5. The asset has been depreciated at an annual rate of $4,100 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $16,100, the company should record:

Neither a gain nor a loss is recognized on this type of transaction.

A gain on sale of $3,150.

A gain on sale of $3,000.

A loss on sale of $3,150.

A loss on sale of $3,000.

An asset's book value is $19,100 on December 31, Year 5. The asset has been depreciated at an annual rate of $4,100 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $16,100, the company should record:

Explanation / Answer

ANSWER: A loss on sale of $3,000. Book Value - Sale price = 19100- 16100= (3000) Loss

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