BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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sales price and original cost
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sales price and salvage value
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sales price and net book value
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net book value and salvage cost
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Detailed explanation-1: -Gain or loss on disposal of an asset is the difference between the sale price of an asset and the cost or valuation less accumulated depreciation up to the date of disposal.
Detailed explanation-2: -The original purchase price of the asset, minus all accumulated depreciation and any accumulated impairment charges, is the carrying value of the asset. Subtract this carrying amount from the sale price of the asset. If the remainder is positive, it is a gain. If the remainder is negative, it is a loss.
Detailed explanation-3: -What is Net Book Value of Assets? Net book value, also known as net asset value, is the value at which a company reports an asset on its balance sheet. It is calculated as the original cost of an asset less accumulated depreciation, accumulated amortization, accumulated depletion or accumulated impairment.
Detailed explanation-4: -To calculate net book value, simply take the original cost of the asset and subtract its accumulated depreciation. To find cumulative depreciation, take the per year depreciation and multiply it by the number of years you have owned the asset.