Answer:
Step-by-step explanation:
To calculate the gain or loss on the disposal of the fixed asset, you need to compare the selling price with the book value of the asset.
The book value of the asset is the original cost minus the accumulated depreciation. So, in this case:
Book value = Cost - Accumulated depreciation
= $15,000 - $12,500
= $2,500
Now, let's calculate the gain or loss:
Gain or Loss = Selling Price - Book Value
= $1,750 - $2,500
= -$750
Since the result is negative, it indicates a loss. The amount of loss on the disposal of the fixed asset is $750.
