Question

An asset with a net book value of $1,225 was discarded, having no market value. How much will be recorded as a loss or gain on disposal?
a. loss of $1,225
b. gain of $1,225
c. no loss or gain
d. Cannot be determined with the information given.

Answer 1

Answer:

(A) loss of $1,225

Explanation:

Net book value is the value at which an organization or company records an asset in its balance sheet. Net book value is the original cost of an asset, without adding the depreciation, depletion, amortization, that has been accrued at the period oof the asset's useful life. So if an asset with a net book value of $1,225 was discarded, having no market value, the same amount ($1,225) will be the value recorded as a loss by the company's accountant.