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zalisa [80]
3 years ago
6

rawford Trucking plans to dispose of two trucks in 2022. They sell the first truck on January 2 and the second truck on July 9.

If the end of their fiscal year is December 31, how will the calculation of book value differ for these two vehicles?
Business
1 answer:
MakcuM [25]3 years ago
5 0

Answer: C : They will need to subtract a partial year of depreciation from the book value of the second truck but not the first truck.

Explanation:

When disposing of fixed assets such as vehicles, depreciation has to be charged on them to see their Net Book Value.

Companies usually depreciate their vehicles on a yearly basis in accordance with the end of their fiscal year. This company therefore most likely depreciates on December 31.

The first truck is sold 2 days after this Depreciation so there is no need to add more depreciation to it.

However the second truck on the other hand was sold 6 months later. Depreciation needs to charged on this substantial period but since it was not for the full year, a partial one needs to be charged.

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Copywrite holders have sole right to their works which usually lasts throughout their life time and can either be distributed, reproduced or even be displayed publicly.Although there may be permission or licensing from the owner to another party to reproduce his works.

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