Understand how an asset's book value and asset's value is calculated on the time of sale.

May 5th, 2015
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Understand how an asset 's book value is determined and what kind of transaction would result when an asset is sold with definitions and examples in an understandable way.

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Question : Understand how an assets book value is determined and what kind of transaction would result when that asset is sold?Answer: The cost of a plant asset minus the total recorded depreciation, as shown by the Accumulated Depreciation account. The remaining un-depreciated cost is called book value of an asset. It is also known as carrying value. Example: On April 1, 2005, Matson Industries purchased new equipment at accost of $325,000. The useful life of this equipment was estimated 5 years with a residual value of $25,000. Assume that the equipment is sold at th

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