Question

A company had a tractor destroyed by fire. The tractor originally cost $141,000 with accumulated depreciation of $74,400. The proceeds from the insurance company were $36,000. The company should recognize:

Answer 1

Answer:

The correct answer is "$30,600". The further explanation is given below.

Explanation:

The given values are:

Tractor's cost

= $141,000

Accumulated depreciation

= $74,400

Now,

The book value on sale's date will be:

= $Cost-Accumulated \ depreciation$

= $141,000-74400$

= $66,600$ ($)

The Loss on sale is:

= $66,600-36,000$

= $30,600$