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Hoochie [10]
3 years ago
11

Equipment originally costing $65,000 has accumulated depreciation of $25,000. If the equipment is sold for $30,000, the company

should record: Multiple Choice A gain of $10,000. A loss of $10,000. A loss of $35,000. No gain or loss.
Business
1 answer:
Ksenya-84 [330]3 years ago
6 0

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Equipment originally costing $65,000 has accumulated depreciation of $25,000. The equipment is sold for $30,000.

An asset provides gain or loss depending if the selling price is higher or lower the book value.

Book value= Purchasing price - accumulated depreciation

Book value= 65,000 - 25,000= $40,000

Gain or loss from selling the equipment= selling price - book value

Loss from selling the equipment= 30,000 - 40,000= -$10,000

You might be interested in
Perdue Company purchased equipment on October 1 for $55,060. The equipment was expected to have a useful life of three years, or
zhenek [66]

Answer:

$13,300 for each of the four years

Unit of output

$9800

$18900

$16100

$8400

double declining

27530

13765

6882.5

3441.25

Explanation:

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

( $55,060 - $1,860) / 4 = $13,300 each year

Activity method based on hours worked = (hours worked that year / total hours of the machine) x  (Cost of asset - Salvage value)

( $55,060 - $1,860) / 7600 = 7

year 1 = 7 x 1400 = 9800

year 2 = 7 x 2700 = $18900

year 3 = 7 x 2300 = $16100

year 4 = 7 x 1200 = $8400

Depreciation expense using the double declining method = Depreciation factor x cost of the asset

Depreciation factor = 2 x (1/useful life) = 2/4 = 0.5

Year 1 = $55,060 x 0.5 = 27530

book value =  $55,060 - 27530 = 27530

year 2 = 27530 x 0.5 = 13765

book value = 27530 - 13765 =  13765

year 3 =  13765 x 0.5 = 6882.50

5 0
3 years ago
Net income reported on the income statement for the current year was $350,000. Depreciation recorded on plant assets was $26,000
Sonbull [250]

Answer:

$357,500

Explanation:

Cash flow from operating activities on the statement of cash flows:

= Net income + Depreciation Expense - Increase in accounts receivable - Increase in inventory + Decrease in prepaid expense - Decrease in accounts payable

= $350,000 + $26,000 - $3,000 - $5,000 + $2,500 - $13,000

= $357,500

Therefore, the net cash flow from operating activities is $357,500.

6 0
3 years ago
On December 31, 2022, Monty Company prepared an income statement and balance sheet and failed to take into account three adjusti
irga5000 [103]

Answer:

Salaries and Wages are owed so they are now liabilities. They are also expenses and will reduce the Net Income.

Rent Revenue was in advance for 2 months meaning one of those months will be December which is in the current period so;

= 7,520/2

= $3,760 will be added to net income for the year

The same amount will be removed from Liabilities as the revenue has now been recognized.

Depreciation reduces the value of Fixed assets so will be deducted from Assets.

It is also an expense so it will reduce Net Income.

Whatever happens to Net Income will happen to Stockholders' equity as well because Net Income is an Equity account.

5 0
3 years ago
Larkspur Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $104,800 to m
Lady_Fox [76]

Answer:

First find the present value of the lease. Payments are constant and fixed so this is an annuity. As it is to be paid from the beginning, it is an Annuity due.

= Annuity * Present value interest factor of annuity due, 5 years, 7%.

= 37,400 * 4.3872

= $164,081

Date                          Account Details                            Debit              Credit

Dec. 31, 2019            Lease Receivable                         $164,081

                                 Cost of goods sold                       $104,800

                                 Sales                                                                    $164,081

                                 Inventory                                                             $104,800

Date                          Account Details                           Debit                Credit

Dec. 31, 2019           Cash                                             $37,400

                                 Lease Receivable                                               $37,400

5 0
3 years ago
Three major segments of the transportation industry are motor carriers, such as YRC Worldwide (YRCW); railroads, such as Union P
erma4kov [3.2K]

Answer and Explanation:

The computation of the asset turnover for all three companies is as follows:

<u>Particulars        YRC            UNP                CH </u>

Sales                4697500    19941000          13144413

Divided by

Average

total assets     1824700       55159000          3436058

Assets turnover  2.6                0.4                    3.8

4 0
3 years ago
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