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A trucking company sold its fleet of trucks for $55,500. The trucks originally cost $1,431,000 and had Accumulated Depreciation of $1,274,000 recorded through the date of disposal. What gain or loss did the trucking company record when it sold the fleet of trucks?Multiple ChoiceGain of $101,500.Gain of $55,500.Loss of $55,500.Loss of $101,500.

Question

A trucking company sold its fleet of trucks for 55,500.Thetrucksoriginallycost55,500. The trucks originally cost 1,431,000 and had Accumulated Depreciation of 1,274,000recordedthroughthedateofdisposal.Whatgainorlossdidthetruckingcompanyrecordwhenitsoldthefleetoftrucks?MultipleChoiceGainof1,274,000 recorded through the date of disposal. What gain or loss did the trucking company record when it sold the fleet of trucks?Multiple ChoiceGain of 101,500.Gain of 55,500.Lossof55,500.Loss of 55,500.Loss of $101,500.

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Solution

To calculate the gain or loss from the sale of an asset, you need to subtract the book value of the asset from the sale price.

The book value of an asset is calculated by subtracting the accumulated depreciation from the original cost of the asset.

In this case, the original cost of the trucks is 1,431,000andtheaccumulateddepreciationis1,431,000 and the accumulated depreciation is 1,274,000.

So, the book value of the trucks is 1,431,000−1,431,000 - 1,274,000 = $157,000.

The trucks were sold for 55,500,sothegainorlossfromthesaleis55,500, so the gain or loss from the sale is 55,500 - 157,000=−157,000 = -101,500.

Therefore, the trucking company recorded a loss of $101,500 when it sold the fleet of trucks.

So, the correct answer is "Loss of $101,500".

This problem has been solved

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