Question :
107. Betterments are: A. Expenditures making a plant asset more efficient or productive.B. Also : 1258016
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 againstthe 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. Amachine 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.
