Sale of surplus asset above carrying value
(a) increase in owner equity
(b) increase in OCI
(c) Increase in asset turnover ratio
which one is right and why
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When asset is sold, the entry will be-
Bank A/c Dr. (@ net proceeds)
Loss (B/f) Dr.
To Asset (@ Carrying amount)
To Profit (B/f- profit on sale)
The asset will be reduced, sales is not impacted . So Asset turnover ratio increased.
This profit goes to profit & loss account (not OCI).
This does not directly impacts the owners equity.
I think it’s C