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Question: A fixed asset with a cost of $15,000 and accumulated depreciation of $12,500 is sold for $1,750. What is the amount of gain or loss on disposal of the fixed asset?



Answer :

Answer:

Step-by-step explanation:

To calculate the gain or loss on the disposal of the fixed asset, you need to compare the selling price with the book value of the asset.

The book value of the asset is the original cost minus the accumulated depreciation. So, in this case:

Book value = Cost - Accumulated depreciation

= $15,000 - $12,500

= $2,500

Now, let's calculate the gain or loss:

Gain or Loss = Selling Price - Book Value

= $1,750 - $2,500

= -$750

Since the result is negative, it indicates a loss. The amount of loss on the disposal of the fixed asset is $750.

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