Question

A plant asset cost $187,200 and has $129,600 accumulated depreciation recorded. If the plant asset is sold for $46,800, the company should recognize:

	No gain or loss.
	A gain of $10,800.
	A loss of $10,800.
	A gain of $57,600.

A machine with a cost of $20,000, an estimated useful life of four years, and and estimated salvage value of $4,000 is being depreciated using the straight-line method. How much depreciation will be charged for the third year?

	$4,000.
	$5,000.
	$8,000.
	$12,000.

Lock Co. bought equipment with a 5-year life and no salvage. The equipment was very heavily used the first two years of its life. Lock decided to sell the equipment at the beginning for the third year. Which of the following depreciation methods is most likely to show a loss on sale of this equipment?

	Modified Accelerated Cost Recovery System.
	Units of Production.
	Double-declining balance.
	Straight-line.

A truck with a cost of $30,000, an estimated useful life of four years, and an estimated salvage value of $2,000 is depreciated using the straight-line method. What is the Accumulated Depreciation balance and the book value after the second year of use?

	15,000 and 15,000.
	14,000 and 28,000.
	14,000 and 16,000.
	16,000 and 14,000.

Answer 1