Carmen Company has an asset that cost $5,000 and currently has accumulated depreciation of $2,000. Suppose the firm sold the asset for $2,500 and is subject to a 30% income tax rate. The loss on disposal would be:
A. $650.
B. $500.
C. $350.
D. $2,500.
E. None, because the transaction produced a gain.
Answer: B
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