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Tpy6a [65]
3 years ago
5

A fixed asset with a cost of $30,000 and accumulated depreciation of $27,500 is sold for $3,500. What is the amount of the gain

or loss on the disposal of the fixed asset?
A. $3,500 gain
B. $1,000 gain
C. $1,000 loss
D. $2,500 loss
C. $3,500 loss
D. $2,500 gain
Business
1 answer:
MissTica3 years ago
3 0

Answer:

The correct answer is B that is gain of $1,000

Explanation:

The amount of gain or loss on the disposal of the fixed assets is computed as:

Amount of loss or gain = (Selling Price + Accumulated depreciation) - Cost of fixed assets

where

Selling Price is $27,500

Accumulated depreciation is $3,500

Cost of fixed assets is $30,000

Putting the values above:

= ($27,500 + $3,500) - $30,000

= $31,000 - $30,000

= $1,000

It is a gain of $1,000 on disposal of the fixed assets.

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Bonds that may be exchanged for common stock at the option of the bondholders are called
Sedaia [141]

Answer: CONVERTIBLE BONDS

                           

Explanation: In simple words, convertible bonds refers to those fixed assets securities that could be converted into common stock on the discretion of the bondholders.

Such kind of securities is usually used by companies who are new to the market and wants to attract investors with maximum security of bonds as initial investment and maximum potential benefit as an option of converting bonds into common stock.

These types of bonds offer lower interest rates due to the embedded option of conversion.

4 0
3 years ago
Why is one dollar now worth more than one dollar in the future?
Galina-37 [17]
Because then there will be a limited amount of supplies and resources on Earth, so the value will be rare and expensive.
4 0
3 years ago
When recording depreciation, which of the following statements is true?
professor190 [17]

Answer:

D. None of the above are true.

Explanation:

As while recording depreciation, the total assets is decreased and the stockholder equity is also decreased as depreciation is a contra asset account

In the side of stockholder equity, the net income, the retained earning and the stockholder equity is decreased

whereas, the total asset is decreased as the amount of asset is reduced by deducting the accumulated depreciation amount

The journal entry is shown below for better understanding

Depreciation Expense A/c XXXXX

To Accumulated Depreciation XXXXX

(Being depreciation expense is recorded)

5 0
3 years ago
Beverley wants to sign up for time warner cable internet onlnie. she has the option to choose residential or business services.
Sindrei [870]
Choose a different server
6 0
3 years ago
An investor owns 5,000 shares of IBM stock, $105 per share. He thinks that there is no large rise and possible drop in price. Th
lutik1710 [3]

Answer:

If IBM stock price rises from $105 to $112, the profit associated with the passive strategy is $ 35,000 and the profit associated with the covered call writing strategy is $ 45,000 .

Explanation:

Shares = 5000

Price of shares = $105

Sell Price = $112

The profit associated with the passive strategy  = $(112 - 105) × 5000

= $ 35,000

Now with covered call also included in the strategy the profit/loss from covered call can be calculated as

Strike Price = $110

Spot Price = $112

Total Shares on which Call options are sold = 50 × 100 = $5000

Total Premium received = 5000 × 4 = $20000

(Spot Price - Strike Price ) × Total Shares

= $(112 - 110) × 5000

= $10,000

Hence Net Profit = Premium received - $10,000 = $20,000 - $10,000

= $ 10000

Hence the profit associated with the covered call writing strategy

= $35,000 + $10,000

= $ 45,000

5 0
3 years ago
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