On January 1, 20Y1, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 20Y3, Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 20Y3? Select one: O A. Gain, $5,000. O B. Loss, $3,000. OC. Loss, $18,000. O D. Gain, $22,000. Clear my choice

On January 1, 20Y1, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 20Y3, Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 20Y3? Select one: O A. Gain, $5,000. O B. Loss, $3,000. OC. Loss, $18,000. O D. Gain, $22,000. Clear my choice

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 9MCQ: Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a...

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Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
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Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
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1. Assume a company purchased a forklift on May 2, 20Y6 for $23,000. The residual value of the forklift is $500 and the estimated useful life is 10 years. The company uses the straight-line method to depreciate the forklift. What is the net book value of the forklift as of December 31, 20Y6? Please explain your answer and show your work. 2. Suppose the same company sells the forklift on November 1, 20Y9 for $14,000. What is the net book value on the day of the sale? Please explain your answer and show your work.
Strawberry Fields purchased a tractor at a cost of $39,000 and sold it two years later for $25,600. Strawberry Fields recorded depreciation using the straight-line method, a five-year service life, and an $7,000 residual value. 1. What was the gain or loss on the sale? 2. Record the sale. Mc Sraw Hill Complete this question by entering your answers in the tabs below. Required 1 Required 2 What was the gain or loss on the sale? on sale 1 of 31 Next >
Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $164,000. The asset is expected to have a salvage value of $16,600 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be: Multiple Choice $32,184 $48,276 $88,560 $147,600 $35,424
Peavey Enterprises purchased a depreciable asset for $25,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,600, what will be the amount of accumulated depreciation on this asset on December 31 Year 3? Multiple Choice О $5,600 $22,400 $18,667 $15,400 О $4,667
Assume a company purchased a forklift on May 2, 20Y6 for $23,000. The residual value of the forklift is $500 and the estimated useful life is 10 years. The company uses the straight-line method to depreciate the forklift. What is the net book value of the forklift as of December 31, 20Y6? Please explain your answer and show your work.