Question

A company buys a fixed asset on January 1, 2012 for $20,000. The accumulated depreciation for three years is $12,000. What will be the book value of the assets on December 31, 2014? The asset is sold on December 31, 2014 for $10,000. Will the company makes a profit from this disposal?

The book value of the assets on December 31, 2014 is $_____. The company will make a _____.

First blank
1. 8,000
2. 5,000
3. 12,000

Second blank
1. Loss of 2,000
2. Profit of 2,000
3. Profit of 8,000

Answer 1

First blank—1.8grand second—loss of 2,000