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DaniilM [7]
3 years ago
11

On January 1, 2020, a company purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck

has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2022, the company sold the truck for $30,000. What amount of gain or loss should the company record on December 31, 2022?
Business
1 answer:
lianna [129]3 years ago
8 0

Answer:

a loss of $3,000

Explanation:

A company makes a gain on the disposal of an asset when the amount received from the disposal is higher than the net book value or carrying amount of the asset.

The netbook value of the asset is the difference between the cost and the accumulated depreciation of the asset. The accumulated depreciation is the total depreciation over the used life of the asset and the depreciation is the result of the cost less residual value divided by the estimated asset life.

In light of the above,

Annual depreciation = ($48,000 - $8,000)/8

= $5,000

Between January 1 2020 and December 31 2022 is 3 years,

Accumulated depreciation at December 31, 2022

= 3 * $5,000

= $15,000

NBV at December 31, 2022

= $48,000 - $15,000

= $33,000

Gain/(loss) on disposal = $30,000 - $33,000

= ($3,000)

The company would record a loss of $3,000

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<h3>What is a Perfect Competitive Market?</h3>

Perfect competition is an ideal type of market structure where all producers and consumers have full and symmetric information and no transaction costs. There are a large number of producers and consumers competing with one another in this kind of environment.

Perfect competition is a market structure where many firms offer a homogeneous product. Because there is freedom of entry and exit and perfect information, firms will make normal profits and prices will be kept low by competitive pressures.

<h3>What are some examples of Perfectly Competitive Markets?</h3>

3 Perfect Competition Examples

  1. Agriculture: In this market, products are very similar. Carrots, potatoes, and grain are all generic, with many farmers producing them.
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Thus, we can say that the correct option is B.

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InSeason Inc. started a chain of organic supermarkets that had initial success. The managers achieved a mastery of the firm's cu
Hitman42 [59]

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When the ace hardware store located in franklin mails an advertising flyer to all the residents in the community, it is an examp
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Maura had to get a $350 emergency loan at a very high interest rate to pay for dental work. The lender did not need her credit h
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mario62 [17]

Answer:

Net income increase - $4,890

Explanation:

The computation of the effect on net income is shown below:

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