Question

The book value for a truck was $1,728 in year 5. The asset was sold for $4000 also in year 5 . Determine whether the gain or loss on the sale of the truck.

a.This represents a gain on the sale of the truck for the amount of $2,252
b.This represents a gain on the sale of the truck for the amount of $2,272
c.This represents a gain on the sale of the truck for the amount of $2,252
d.This represents a loss on the sale of the truck for the amount of $2,272

Answer 1

The truck was sold for $4,000, which, when subtracted from the book value of $1,728, results in a gain of $2,272. So, it represents a gain on the sale of the truck for the amount of $2,272.

Step-by-step explanation:

The book value for a truck was $1,728 in year 5. The asset was sold for $4,000 also in year 5. To determine whether there was a gain or loss on the sale of the truck, you subtract the book value from the sale price.
So, the calculation would be $4,000 (sale price) - $1,728 (book value) = $2,272. Since the sale price is higher than the book value, this represents a gain on the sale of the truck for the amount of $2,272. Therefore, the correct answer is b. This represents a gain on the sale of the truck for the amount of $2,272.