Which Of The Following Situations Will Result In Recognizing A Gain On Sale Of A Plant Asset?
The correct option of this multiple choice question is A as proved below: Given: Selling Price (SP) = $1,000, Book Value (BV) = 0 as Plant Asset (PA) is fully depreciated i.e., its useful life has been expired. Gain On Sale Of Plant Asset (PA) = Selling Price - Book Value of Plant Asset Here Book Value of Plant Asset = Cost - Accumulated Depreciation By putting the values, we have: Gain On Sale On Plant Asset = $1,000 - 0 = $1,000 The option B is an incorrect choice as it shows Loss on sale of PA as shown below: