The owner's equity of a sole proprietorship will change only if the disposal of an asset causes a gain or loss to be reported on the income statement.
To illustrate this, let's assume that a truck that was used in the business is sold for $5,000. If the truck had a cost of $40,000 and accumulated depreciation of $35,000 there will be no gain or loss reported on the income statement. The reason is the 游戏电竞线上外围APP v5.2 $5,000 received is equal to the $5,000 of book value that is being removed from the balance sheet . With no gain or loss on the disposal, the owner's equity is unchanged.
On the other hand, if the same truck is sold for $3,000 there will be a $2,000 loss ($3,000 of cash received versus the $5,000 of book value removed) reported on the income statement. When the account Loss on Disposal of Assets is closed, the owner's capital account will be reduced by the $2,000 loss.
