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Pru & Co. purchased a vehicle for $48,000 on 1 January 2020. Its Accumulated Depreciation as...

Pru & Co. purchased a vehicle for $48,000 on 1 January 2020. Its Accumulated Depreciation as at 31 December 2023 is $28,000. The Co. uses straight line method of Depreciation. The Trademark was sold for $18,000 as at 31 December 2023 ? Pru & Co. uses calendar year accounting period. What is the result of the sale?

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Expert Solution

WORKING NOTES: 1
CALCULATION OF BOOK VALUE OF THE ASSETS AS ON 31 DECEMBER 2023
Purchase Cost of Vehicle $                      48,000
Less: Accumulated Depreciation as on Dec 2023 $                      28,000
Book Value of Vehicle as on Dec 2023 $                      20,000
SOLUTION
CALCULATION OF GAIN OR LOSS ON SALE OF VEHICLES
Sale Value of the Vehicle $                      18,000
Less : Book Value of the Vehicle as on Dec 2023 $                      20,000
Loss on sale of Vehicle $                      -2,000
Answer = There is loss of $ 2,000 on sale of Vehicle

ekkarill92 answered 2 years ago
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