[Solve] Loss on Disposal of Assets Income Statement Example

 welcome back to our blog today we are going to solve an example of loss on disposal of assets income statement so if you are a B.com student and learning financial accounting then this topic could help you to understand how to record loss on disposal of the assets income statement.

What are losses on disposal of assets income statement?

 Loss on Disposal of Assets Income Statement

In simple language “Loss on disposal of assets in the income statement reflects the financial impact of selling or disposing of an asset below its carrying value or book value.”

Now let's solve an example:

loss on disposal of assets income statement

XYZ Company Income Statement

For the Year Ended December 31, 2023

Revenue:

   Sales                                             500,000

   Service Revenue                                   100,000

   Total Revenue                                    600,000

Expenses:

   Cost of Goods Sold (COGS)                         250,000

   Operating Expenses:

      Selling Expenses                                50,000

      Administrative Expenses                         30,000

      Depreciation                                   40,000

      Other Expenses                                  20,000

   Interest Expense                                   10,000

   Income Tax Expense                                 50,000

   Total Expenses                                   450,000

Net Income before Loss on Disposal of Assets         150,000

Loss on Disposal of Assets (e.g., Equipment)        20,000

Net Income                                          130,000

• In this given example the company has 600,000 in total revenue where as the expenses amount is 450,000.

• let me tell you that Before considering the loss on disposal of assets, the company had a net income of 150,000.

• In this example, loss on disposal of assets (e.g., equipment) is 20,000.

• Now net income is  150,000 - 20,000 = 130,000.

Conclusion

I hope you understand the basics of loss on disposal of assets income statement and also know how to record it in income statement. For more examples, you can follow our blog.