1. A truck that cost $42,000 and on which $35,000 of accumulated depreciation ha
ID: 2566739 • Letter: 1
Question
1. A truck that cost $42,000 and on which $35,000 of accumulated depreciation has been recorded was disposed of for $10,500 cash. The entry to recor A) loss of $3,500. B) credit to the Truck account for $7,000 C) credit to Accumulated Depreciation for $35,000. D) gain of $3,500 d this event would include a 2. The interest on a $4,000, 6%, 60-day note receivable is A) $120. B) $80. C) $240. D) $40. 3. If disposal of a plant asset occurs during the year, depreciation A) B) C) D) recorded for the fraction of the year to the date of the disposal. recorded for the whole year. not recorded for the year. not recorded if the asset is scrapped. (4 On July 1, 2011, Hale Kennels sells equipment for $66,000. The equipment originally cost $180,000 had an estimated 5-year life and an expected salvage value of $30,000. The accumulated depreciation account had a balance of $105,000 on January 1, 2011, using the straight-line method. The gain or loss on disposal is A) $6,000 gain. B) $9,000 gain. C) $6,000 loss D) $9,000 loss. Depreciation is the process of allocating the cost of a plant asset over its service life in A) an accelerated and accurate manner. B) a systematic and rational manner. C) a conservative market-based manner. 5. D) an equal and equitable manner. the fire, the balance of the Accumulated Depreciation account amounted to $38,000. The company received $32,000 reimbursement from its insurance company. The gain or loss as a result of the fire was A) $24,000 loss. B) $14,000 gain. 6. Yanik Company's delivery truck, which originally cost $56,000, was destroyed by fire. At the time of C) $24,000 gain. D) $14,000 loss. Page 1Explanation / Answer
Q 1. Answer is D. Gain of $ 3500
The explanation is as follows:
The Journal entry is as follows:
Accumulated depreciation- Truck Dr. 35,000
Cash account Dr. 10,500
Truck Equipment Cr. 42,000
Gain on disposal of asset Cr. 3,500
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