Carrying Value of the asset= Cost of the asset-Accumulated Depreciation
=250000-200000
=$50000
The asset is sold for $50000, Thus there is no loss or gain on the transaction.
Answer:
There is no gain/loss on disposal hence the company would only de-recognize the asset from the books and recognize the cash received cash received from the disposal.
Explanation:
Cost of asset = $250,000
Accumulated depreciation = $200,000
Net book value of asset = Cost of asset - Accumulated depreciation
= $250,000 - $200,000
= $50,000
Sales on disposal = $50,000
Gain/(loss) on disposal = sales - net book value
= $50,000 - $50,000
= 0
There is no gain/loss on disposal hence the company would only de-recognize the asset from the books and recognize the cash received cash received from the disposal.