Asked by Hannah Silene on Jul 05, 2024
Verified
The Key Company sold a machine.The machine had accumulated depreciation of $50,000 and a salvage value of $6,000.If the machine sold for $16,000 and a gain of $4,000 is recognized,the original cost of the asset is
A) $54,000.
B) $62,000.
C) $66,000.
D) $70,000.
Accumulated Depreciation
The total amount of depreciation expense that has been recorded over time for tangible assets, reducing their carrying value on the balance sheet.
Salvage Value
The forecasted sell-on value of an asset at the conclusion of its operational period.
- Learn the process of calculating the financial outcome, either gain or loss, from the disposal of an asset and how it influences the accounting statements.
Verified Answer
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Vishal KuruppuJul 09, 2024
Final Answer :
B
Explanation :
Sales price $16,000 - book value ($? - $50,000)= ordinary gain $4,000Book value = $66,000 - $4,000 = $62,000
Learning Objectives
- Learn the process of calculating the financial outcome, either gain or loss, from the disposal of an asset and how it influences the accounting statements.