Answer:
The correct answer is B that is gain of $1,000
Explanation:
The amount of gain or loss on the disposal of the fixed assets is computed as:
Amount of loss or gain = (Selling Price + Accumulated depreciation) - Cost of fixed assets
where
Selling Price is $27,500
Accumulated depreciation is $3,500
Cost of fixed assets is $30,000
Putting the values above:
= ($27,500 + $3,500) - $30,000
= $31,000 - $30,000
= $1,000
It is a gain of $1,000 on disposal of the fixed assets.
