Question : 107.Betterments are: A.Expenditures making a plant asset more efficient or : 1236325

107.Betterments are:    

A.Expenditures making a plant asset more efficient or productive.

B.Also called ordinary repairs.

C.Always increase an asset’s life.

D.Revenue expenditures.

E.Credited against the asset account when incurred.

108.An asset’s book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record:   

A.A loss on sale of $12,000.

B.A gain on sale of $12,000.

C.Neither a gain nor a loss is recognized on this transaction.

D.A gain on sale of $3,000.

E.A loss on sale of $3,000.

109.Martinez owns an asset that cost $87,000 with accumulated depreciation of $40,000. The company sells the equipment for cash of $42,000. At the time of sale, the company should record:   

A.A gain on sale of $2,000.

B.A loss on sale of $2,000.

C.A loss on sale of $5,000.

D.A gain on sale of $5,000.

E.A loss on sale of $45,000.

110.Martinez owns machinery that cost $87,000 with accumulated depreciation of $40,000. The company sells the machinery for cash of $42,000. The journal entry to record the sale would include:    

A.A credit to Accumulated Depreciation of $40,000.

B.A credit to Gain on Sale of $2,000.

C.A credit to Machinery of $47,000.

D.A debit to Cash of $42,000.

E.A debit to Accumulated Depreciation of $47,000.

111.An asset’s book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record:   

A.Neither a gain or loss is recognized on this type of transaction.

B.A gain on sale of $2,000.

C.A loss on sale of $1,000.

D.A gain on sale of $1,000.

E.A loss on sale of $2,000.

112.Marks Consulting purchased equipment costing $45,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 8 years. Straight-line depreciation is used. If the equipment is sold on July 1, Year 5 for $20,000, the journal entry to record the sale will include a:    

A.Credit to cash for $20,000.

B.Debit to accumulated depreciation for $22,500.

C.Debit to loss on sale for $10,000.

D.Credit to loss on sale for $10,000.

E.Debit to gain on sale for $2,500.

113.A machine costing $75,000 is purchased on September 1, Year 1. The machine is estimated to have a salvage value of $10,000 and an estimated useful life of 4 years. Double-declining-balance depreciation is used. If the machine is sold on December 31, Year 3 for $13,000, the journal entry to record the sale will include:    

A.A credit to gain on sale for $8,000.

B.A debit to loss on sale for $2,625.

C.A credit to accumulated depreciation for $59,375.

D.A debit to loss on sale for $3,042.

E.A credit to gain on sale for $4,979.

114.An asset can be disposed of by all of the following except:    

A.Discarding it.

B.Selling it.

C.Exchanging it for another asset.

D.Donating it to charity.

E.Continuing to use it after it is fully depreciated.

115.A company sold equipment that originally cost $100,000 for $60,000 cash. The accumulated depreciation on the equipment was $40,000. The company should recognize a:    

A.$0 gain or loss.

B.$20,000 gain.

C.$20,000 loss.

D.$40,000 loss.

E.$60,000 gain.

116.A company discarded a computer system originally purchased for $18,000. The accumulated depreciation was $17,200. The company should recognize a(an):    

A.$0 gain or loss.

B.$800 loss.

C.$800 gain.

D.$8,000 loss.

E.$7,200 loss.