Question :
11) When plant assets exchanged:
A) the old asset does not : 1230211
11) When plant assets are exchanged:
A) the old asset does not need to be removed from the books.
B) the new asset will be debited for the list price of the asset.
C) the gain or loss on the exchange is equal to the difference between the fair value and the book value
of the old asset.
D) total assets increase.
12) Under IFRS:
A) plant assets can be revalued downward, but not upwards to reflect their current value.
B) straight-line depreciation is not allowed.
C) gains, but not losses, can be recorded on the disposal of an asset.
D) a component approach is used to depreciate a building.
13) Hawthorne Company sold office furniture for $2,500 cash. The furniture cost $30,000 and had accumulated depreciation through the date of sale totaling $29,000. The company will recognize:
A) a gain of $1,500.
B) a loss of $1,500.
C) a gain of $2,500.
D) neither a gain or a loss.
14) Smucker’s Company sold equipment costing $65,000 with $60,000 of accumulated depreciation for $10,000 cash. The company’s journal entry to record this sale will NOT include a:
A) credit to Equipment for $65,000.
B) credit to Gain on Sale of Equipment for $5,000.
C) debit to Accumulated Depreciation for $60,000.
D) debit to Gain on Sale of Equipment for $5,000.
15) Equipment costing $37,450 with a book value of $18,410 is sold for $20,000. The journal to record the sale will include a :
A) debit to cash for $18,410.
B) debit to accumulated depreciation for $18,410.
C) debit to gain on sale of equipment for $1,590.
D) debit to accumulated depreciation for $19,040.
16) Equipment purchased for $85,000 on January 1, 2010, was sold on July 1, 2013. The company uses the straight-line method of computing depreciation and recognizes $17,000 of depreciation expense annually. When recording the sale, the company should record a debit to Accumulated Depreciation for:
A) $0.
B) $51,000.
C) $59,500.
D) $68,000.
17) Equipment acquired on January 1, 2010, is sold on June 30, 2013, for $11,200. The equipment cost $26,800, had an estimated residual value of $6,800, and an estimated useful life of 5 years. The company prepared financial statements on December 31, and the equipment has been depreciated using the straight-line method. Prior to determining the gain or loss on the sale of this equipment, the company should record depreciation of:
A) $0.
B) $2,000.
C) $5,000.
D) $31,700.
18) Happy Acres, Inc., sold equipment for $3,000 cash. The equipment cost $74,300 and had accumulated depreciation through the date of sale of $70,000. The journal entry to record the sale:
A) will record a gain on the sale of $1,300.
B) will debit Accumulated Depreciation for $74,300.
C) will decrease net assets.
D) will increase stockholders’ equity.
19) Thomas Company trades in a printing press for a newer model. The cost of the old printing press was $61,500, and accumulated depreciation up to the date of the trade-in amounts to $38,000. The company also pays $41,200 cash for the newer printing press. The journal entry to acquire the new printing press will require a debit to Equipment for:
A) $41,200.
B) $61,500.
C) $64,700.
D) $102,700.
20) Mindy’s Boutique has a beginning balance in the equipment account of $137,000. During the year, they purchased $245,000 worth of equipment. At the end of the year, the balance in the equipment account was $315,000. The cost of the equipment that Mindy’s Boutique sold was:
A) $58,000.
B) $67,000.
C) $108,000.
D) $178,000.
