In the asset scenario, what was the book value immediately before sale?

In the asset scenario, what was the book value immediately before sale?

• A. $1200
• B. $1000
• C. $1100
• D. $900

Answer: (B)

Book value is the amount an asset is carried on the books, found by subtracting accumulated depreciation from the original cost. To get it, you take what the asset originally cost and reduce it by all depreciation recorded up to the date of sale. In this scenario, after applying the depreciation up to sale, the asset’s value on the books comes out to 1,000. Hence, the correct choice is 1,000. Remember that book value is not the sale price—the sale could be higher or lower, resulting in a gain or loss depending on the difference between the sale price and the book value.

Book value is the amount an asset is carried on the books, found by subtracting accumulated depreciation from the original cost. To get it, you take what the asset originally cost and reduce it by all depreciation recorded up to the date of sale. In this scenario, after applying the depreciation up to sale, the asset’s value on the books comes out to 1,000. Hence, the correct choice is 1,000. Remember that book value is not the sale price—the sale could be higher or lower, resulting in a gain or loss depending on the difference between the sale price and the book value.