Question

A company discarded a computer system originally purchased for $18,000. the accumulated depreciation was $17,200. the company should recognize a(an): $0 gain or loss. $800 loss. $800 gain. $8,000 loss. $7,200 loss.

Answer 1

The amount that is gained/lost by the company is equal to the difference between the accumulated depreciation and original cost of the computer system. That is,
                         gain/loss = 17,200 - 18,000
                         gain/loss = -800
Thus, the company lost 800 because it was not able to maximize the usage of the computer system.