Question : 171.An asset that cost $24,000 and has accumulated depreciation of : 1244485

171.An asset that cost $24,000 and has accumulated depreciation of $18,000 is sold for $5,200. The entry to record the sale would include a

 

a.

credit to the asset account for $6,000.

b.

debit to Loss on Sale of Asset for $18,800.

c.

debit to Loss on Sale of Asset for $800.

d.

credit to Accumulated Depreciation for $18,000.

 

 

 

172.A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of on January 1. If the truck was discarded as having no value, the entry to record this event would include a

 

a.

credit to Accumulated Depreciation for $12,000.

b.

gain of $3,000.

c.

credit to Accumulated Depreciation for $9,000.

d.

loss of $3,000.

 

 

 

173.A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of on January 1. Assume that the truck was disposed of for $2,000 cash. The entry to record this event would include a

 

a.

gain of $1,000.

b.

loss of $1,000.

c.

credit to Accumulated Depreciation for $9,000.

d.

credit to the Truck account for $3,000.

 

 

 

174.The amount of depletion of a coal mine in a year may differ from the depletion expense in the same year because

 

a.

the mine is not in operation all year.

b.

some coal is unsold at the end of the year.

c.

depletion expense includes other costs in addition to depletion.

d.

depletion is based on the passage of time, whereas depletion expense is not.

 

 

 

175.A specialized piece of equipment closely associated with a mine is most likely to be depreciated over a shorter than normal useful life because the

 

a.

equipment contains certain defects.

b.

equipment will be fully utilized.

c.

income tax laws require that a shorter life be used.

d.

mine is expected to be fully depleted in the shorter length of time.

 

 

 

176.Underestimating the number of tons of a mineral that can be mined over a mineral deposit’s life will result in

 

a.

overstated total assets each year.

b.

no effect on total assets each year.

c.

overstated net income each year.

d.

overstated depletion expense each year.

 

 

 

177.How is Accumulated Depletion disclosed in the financial statements?

 

a.

Contra-asset account

b.

Contra-revenue account

c.

Contra-liability account

d.

Expense account

 

 

 

178.The cost of a natural resource is expensed in the year during which the resource is

 

a.

sold.

b.

paid for.

c.

extracted.

d.

purchased.

 

 

 

179.The calculation of depletion is similar to which of the following depreciation methods?

 

a.

Straight-line

b.

Production

c.

Double-declining-balance

d.

Tax depreciation

 

 

 

180.Which of the following items is not classified as a natural resource?

 

a.

Timberland

b.

Goodwill

c.

Gas reserve

d.

Oil well