42. T, F. The difference between the balance in a fixed asset account and its related accumulated depreciation is known as asset's fair replacement value. 43.T, F. Gain or loss in the disposal of a fixed asset is based on its book value. 44. T. F. When the market or replacement value of an asset is consistently below the book value, the asset is said to be impaired. 45. T, F. The higher the ratio of fixed assets to long-term liabilities, the greater is the margin of risk for the shareholders of a company. I 46. All of the following below are needed for the calculation of depreciation except: a. cost b. residual value c. estimated life d. fair market value 1 47. The most widely used depreciation method is: a. straight-line method b. sum-of-year-digits method c.declining balance method d. unit of production method 48. When a company disposes machinery that is fully depreciated, the transaction would be recorded with the following entries: a. debit accumulated depreciation, credit the Machinery account. b. debit Machinery account and credit accumulated depreciation account c. debit cash, and machinery account, credit accumulated account d. debit cash, fully depreciated account and credit Machinery account. e no entry is required. 49. When a company sells machinery at price that is equal to its book value, the required journal entries should be: a. Debit machinery, Accumulated Depreciation; and credit cash b. Debit Cash and accumulated depreciation; and credit Machinery c. Debit Accumulated Depreciation; Credit Machinery d. None of the above. 50. T, F. Fixed assets must be reported in the Assets section of the Balance Sheet with their related