An Asset Which Costs $14,400 and Has Accumulated Depreciation of $8,000

question 15

Multiple Choice

An asset which 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 $800.
• B)A loss of $800.
• C)A loss of $2,400.
• D)A gain of $2,400.

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Definitions:

Cash Dividend

A payment made in cash to shareholders, typically distributed from a company's earnings.

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, investment, or debt repayment, instead of being paid out as dividends.

Dividend Policy

A company's strategy or guideline determining the amount of profits paid out to shareholders as dividends versus being reinvested in the business.

Tax Considerations

Tax considerations involve understanding how taxes affect investment and financial decisions, impacting the overall cost or benefits of these decisions.