iegg. /k-state.instructure.com/courses/51070/quizzes/136014/take D Question 16 1
ID: 2555750 • Letter: I
Question
iegg. /k-state.instructure.com/courses/51070/quizzes/136014/take D Question 16 1 pts A copy machine costs $45.000 when new and has accumulated depreciation of $44,000. Suppose the company discards this machine and receives $1,000. What is the result of the disposal transaction? Loss of $44,000 9 Loss of $1,000 @ No gain or loss O Gain of $1,000 D Question 17 1 pts A cost mine costs $28,000,000 and is expected to produce 200,000,000 tons of coal during its 10 year life. Residual value is expected to be zero because the land will be in poor shape. If the mine produces 1,000,000 tons of coal the first year, how much cost should the accountant record under the units-of-production method? $1,400,000 $2,800,000 $140,000 O $560,000Explanation / Answer
Question 16
Cost of the Machine = 45,000
Accumulated depreciation = 44,000
Book value = Cost - Accumulated depreciation
= 45,000 - 44,000
= 1,000
The Machine is sold for 1,000 which is the book value. As the Machine is sold at book value, there is no gain or loss
The answer is - No gain or loss
Question 17
Depletion base = Cost - salvage value = 28,000,000 - 0 = 28,000,000
Units extracted = 1,000,000
Total expected recoverable units = 200,000,000
Depletion computed on Units of production method = Depletion base * Units extracted / Total expected recoverable units
= 28,000,000 * 1,000,000 / 200,000,000
= 140,000
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