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valentinak56 [21]
4 years ago
7

An asset with a historical cost of $14,725 and accumulated depreciation of $10,000 was discarded, having no market value. how mu

ch will be recorded as a loss or gain on disposal?
Business
2 answers:
Lesechka [4]4 years ago
8 0
<span>If the asset was recorded as having a historical cost of $14,725, then that amount is its initial book value, from which depreciation is subtracted. If the asset had accrued $10,000 in depreciation, then its book value at the time was $4,725. As such, if the asset was disposed with no market value, its disposal will be reflected as a book loss of $4,725.</span>
valentinak56 [21]4 years ago
7 0

Answer:

Loss of $4,725 on disposal

Explanation:

Historical cost = $14,725

Accumulated depreciation = $10,000

Carrying amount or net book value is the difference between the historical cost and the accumulated depreciation.

The difference between the carrying amount and the cash received on disposal is what gives the gain/loss on disposal.

Carrying amount = $14,725 - $10,000

                            = $4,725

Cash received on disposal = 0 (asset was discarded)

Therefore,

Gain/(loss) on disposal = 0 - $4,725

                                      = - $4,725

Loss of $4,725 on disposal.

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