An asset that costs $14,400 and has accumulated depreciation of $8,000 is sold for $5,600. What amount of gain or loss will be recognized when the asset is sold?
A) A gain of $2,400.
B) A loss of $2,400.
C) A loss of $800.
D) A gain of $800.

C. Loss of $800

Explanation:

Given that

Purchase price = 14400

Depreciation = 8000

Selling price = 5600

Thus,

Value of asset after depreciation = Purchase price - Depreciation

= 14400 - 8000

= 6400.

Therefore,

Difference between current value and price sold = value of asset after depreciation - selling price

= 6400 - 5600

= 800

Therefore, there was a loss of $800, since the selling price is less than the value of asset after depreciation.

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