Gains on the sale of long-term assets for cash:

A. Are reported on a net-of-tax basis if material.

B. Are the excess of the cash received over the book value.

C. Are recorded as a debit.

D. Are the excess of the book value over the cash received.

Question

Vanessa Reynolds

Business

6 October, 00:35

Gains on the sale of long-term assets for cash:

A. Are reported on a net-of-tax basis if material.

B. Are the excess of the cash received over the book value.

C. Are recorded as a debit.

D. Are the excess of the book value over the cash received.

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Answers (1)

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Marilyn Hartman · Answer 1

B. Are the excess of the cash received over the book value.

Explanation:

Gain on sale of long term asset is the excess value received as against the asset over its current carrying value.

As for example the carrying book value of an asset = $200,000 and its selling price = $250,000

Then, gain on sale of long term asset = $250,000 - $200,000 = $50,000

Which is excess of cash received over book value.

Gains on the sale of long-term assets for cash:A. Are reported on a net-of-tax basis if material.B. Are the excess of the cash received over the book value.C. Are recorded as a debit.D. Are the excess of the book value over the cash received.

Gains on the sale of long-term assets for cash:

A. Are reported on a net-of-tax basis if material.

B. Are the excess of the cash received over the book value.

C. Are recorded as a debit.

D. Are the excess of the book value over the cash received.