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Home / Questions / Analyze the effect of property, plan, and equipment derecognition 1) Rhoundakona Corporat

Analyze the effect of property, plan, and equipment derecognition 1) Rhoundakona Corporat

Analyze the effect of property, plan, and equipment derecognition

1) Rhoundakona Corporation bought a capital asset on January 1, 2009, at a cost of $35,000. Estimated residual value is $5,000 and the estimated useful life is 8 years. The company uses straight-line depreciation. On January 1, 2012, Rhoundakona's management sells the asset for $25,000. The balance in Accumulated Depreciation on January 1, 2012, is:

A) $3,750

B) $4,375

C) $11,250

D) $13,125

2) Blockware Corporation has selected to use the revaluation model for its assets.  Recently it had its building appraised.  The appraiser placed a $5.0 M value on the building.  Back in 2009 this building was purchased for $4.0M.  This increases in value over cost requires a

A) Dr. to accumulated depreciation

B) Cr. to the building account

C) Cr. to revaluation surplus

D) Dr. to revaluation surplus

3) When an organization has determined that a piece of equipment is impaired the journal entry to record an impair of $1000 would require:

A) a cr to the equipment account

B) a dr to accumulated depreciation

C) a cr to accumulated depreciation

D) a cr to impairment loss

4) Rhoundakona Corporation bought a capital asset on January 1, 2009, at a cost of $35,000. Estimated residual value is $5,000 and the estimated useful life is 8 years. The company uses straight-line depreciation. On January 1, 2012, Rhoundakona's management sells the asset for $25,000. The gain or loss on disposal is:

A) $1,250 loss

B) $1,250 gain

C) $10,000 loss

D) $25,000 gain

5) When a capital asset is sold:

A) depreciation should be recorded through the date of sale

B) the book value of the asset should be credited to the asset account

C) no gain or loss should be recognized if depreciation was taken on the asset

D) a loss should be recognized but not a gain if depreciation was taken on the asset

6) A loss is recorded on the sale of a capital asset when:

A) the asset is sold for a price greater than the asset's book value

B) the asset's book value is less than the balance in Accumulated Depreciation

C) the asset's book value is greater than the amount of cash received from the sale

D) a loss on the sale of a capital asset is not allowed according to GAAP

7) Sowthoveer Company sold some office furniture for $4,500 cash. The furniture cost $24,000 and had accumulated depreciation through the date of sale totaling $21,700. The journal entry to record the sale of the furniture will include a

A) credit to Office Furniture for $2,300.

B)  debit to Gain on Sale of Furniture for $2,200.

C)  credit to Gain on Sale of Furniture for $2,200.

D)  credit to Accumulated Depreciation for $21,700.

8) Bock Corporation sold equipment costing $30,000 with $28,000 of accumulated depreciation for $5,000 cash. Bock's journal entry to record this sale will involve a

A) credit to Equipment for $2,000.

B) debit to Depreciation Expense for $28,000.

C) debit to Gain on Sale of Equipment for $3,000.

D) debit to Accumulated Depreciation for $28,000.

9) Equipment costing $35,000 with a book value of $12,000 is sold for $11,500. The journal entry will involve:

A) credit to Accumulated Depreciation for $23,000

B) debit to Accumulated Depreciation for $12,000

C) debit to Accumulated Depreciation for $23,000

D) credit to Equipment for $12,000

10) Equipment acquired on January 1, 2009, is sold on June 30, 2012, for $4,500. The equipment cost $10,000, had an estimated residual value of $3,000, and an estimated useful life of 5 years. The equipment has been amortized using the straight-line method. The journal entry to record the sale of the equipment involves a:

A) credit to Accumulated Depreciation for $4,900

B) credit to Gain on Sale of Asset for $600

C) debit to Accumulated Depreciation for $4,900

Dec 07 2019 View more View Less

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