A gain or loss on disposal of a plant asset is determined by comparing the

	a.	replacement cost of the asset with asset's original cost
	b.	book vlaue of the asset with the asset's original cost
	c.	original cost of the asset with the proceeds received from its sale
	d.	book value of the asset with the proceeds received from its sale

3 points

QUESTION 23

When an aste is sold, a gain occurs when the

	a.	sale price exceeds the book value of the asset sold
	b.	sale price exceeds the original cost of the asset sold
	c.	book value exceeds teh sle price of the asset sold
	d.	sale price exceeds the depreciate cost of the asset sold

3 points

QUESTION 24

The book value of a plant asste is the difference between the

	a.	replacement cost of the asset and its historical cost
	b.	cost of the asset and the amount of depreciation expense for the year
	c.	cost of the asset and the accumulated depreciation to date
	d.	proceeds received from the sale of the asset and its original cost

3 points

QUESTION 25

A company sells a plant asset that originally cost $150,000 for $50,000 on december 31, 2001. The accumulated depreciation accoutn had a balance of $60,000 after the current year's depreciation of $15,000 had been recorded. the company should recognize a

	a.	$100,000 loss on disposal
	b.	$40,000 gain on disposal
	c.	$40,000 loss on disposal
	d.	$25,000 loss on disposal

3 points

QUESTION 26

A truck costing $12,000 and on which $9,000 of accumulated depreciation has been recorded was discarded as having no value. The entry to record this event would include a

	a.	gain of $3,000
	b.	loss of $3,000
	c.	credit of accumulated depreciation for $9,000
	d.	credit of accumu;ated depreciation fro $12,000

3 points

QUESTION 27

a truck that cost $12,000 and onw hich $9,000 of accumulated depreciation has been recorded was disposed for $2,000 cash. The entry to record this event would include a

	a.	gain of $1,000
	b.	loss of $1,000
	c.	credit to truck account for $3,000
	d.	credit to accumulated depreciation for $9,000

3 points

QUESTION 28

A truck costing $35,000 was destroyed when its engine caught fire. At the date of the fire, the accumulated depreciation on the truck was $16,000. an insurance check for $40,000 was received based on the replacement cost of the truck. the entry to record the insurance proceeds and the disposition of the truck will include a

	a.	Gain on disposal of $5,000
	b.	credit to the truck account of $19,000
	c.	credit to the accumulated depreciation account for $16,000
	d.	gain on disposal of $21,000

Answer rating: 100% (QA)

1 C Original cost of the asset with the proceeds received from its sale ex plan ation The b ook valu ... View the full answer