On Ist January, 1993, lobo Company purchased equipment for N18,000. it uses straight-line depreciation with an estimates eight-year useful life and a N2,000 salvage value. On 31st December, 1996, it sells the equipment for N8000. In recording this sales, it should reflect?
a
N10,000 loss
b
N2,000 loss
c
N4,000 loss
d
N8,000 gain
Explanation
Correct Option
cVideo Explanation
No video available
Post your Contribution
Share:
Discussions (5)
kasjok
7 years ago
there is no correct answer in the options. meanwhile, i if the cost of the sold equipment is assumed to be N8,000 instead of N80,000, then the correct answer is B. This is because the item had depreciated for 4year = 8,000. therefore 18,000 - 8,000 = 10,000 (current value) if now sold for 8,000, then the sales was done with a loss of 2,000. On the other hand, if we go by the question, then is loss is 70,000
