08 - SB: Disposals of Plant Assets (7 - 11 min)

A delivery van that cost $45,000 with accumulated depreciation of $15,000 is sold for $20,000. How much gain or loss will be recognized on this sale? Multiple choice question. $20,000 gain $15,000 gain $20,000 loss $5,000 loss $10,000 loss $10,000 gain

$10,000 loss

Which of the following situations will result in recognizing a gain on sale of a plant asset? Multiple choice question. 1. An asset with book value of $2,000 is sold for $2,000. 2. A fully depreciated asset is discarded. 3. An asset that cost $5,000 with accumulated depreciation of $3,000 is sold for $1,500. 4. An asset with a book value of $2,000 is sold for $1,500. 5. A fully depreciated asset is sold for $1,000.

5. A fully depreciated asset is sold for $1,000.

A plant asset is (depreciated/discarded/obsolete)__________ when it is no longer useful to the company, and it has no market value.

Blank 1: discarded

Book value is greater than the selling price Book value is less than the selling price Book value is equal to the selling price Gain on sale of asset Loss on sale of asset No gain or loss recognized

Book value is greater than the selling price Loss on sale of asset Book value is less than the selling price Gain on sale of asset Book value is equal to the selling price No gain or loss recognized

A company sells a machine that cost $7,000 for $500 cash. The machine had $6,500 accumulated depreciation. The entry to record this transaction will include which of the following entries? (Check all that apply.) Multiple select question. 1. Credit to Machinery for $7,000. 2. Credit to Gain on Sale of Machinery for $500. 3. Debit to Accumulated Depreciation - Machinery for $6,500. 4. Debit to Cash for $500. 5. Credit to Accumulated Depreciation - Machinery for $6,500. 6. Debit to Loss on Sale of Machinery for $500. 7. Credit to Cash for $500. 8. Debit to Machinery for $7,000.

1. Credit to Machinery for $7,000. 3. Debit to Accumulated Depreciation - Machinery for $6,500. 4. Debit to Cash for $500.

Ironworks Co. sells a machine that cost $5,000 with a current book value of $1,500 for $2,000 cash. Ironworks will record a debit to which account and for how much? Multiple choice question. Accumulated Depreciation - Equipment for $1,500 Equipment for $5,000 Accumulated Depreciation - Equipment for $3,500 Equipment for $3,500

Accumulated Depreciation - Equipment for $3,500

Zen Co. sells a copier machine for $2,000. The copier cost Zen $6,000 and at the time of sale, accumulated depreciation was $2,500. Zen will record this sale with which of the following entries? Multiple choice question. Debit to Loss on Disposal of Machinery for $3,500. Credit to Gain on Disposal of Machinery for $1,500. Credit to Gain on Disposal of Machinery for $3,500. Debit to Loss on Disposal of Machinery for $1,500. No gain or loss will be recorded.

Debit to Loss on Disposal of Machinery for $1,500.

Sangmoon Co. sells equipment for $1,000 cash. The equipment cost Sangmoon $6,500 and is fully depreciated at the time of sale and has no salvage value. Sangmoon will record the sale with a credit to which account and for how much? Multiple choice question. Loss on Sale of Equipment for $5,500. Loss on Sale of Equipment for $1,000. Equipment for $5,500. Gain on Sale of Equipment for $1,000. Equipment for $1,000. Gain on Sale of Equipment for $5,500.

Gain on Sale of Equipment for $1,000.

On December 31, Briar Co. disposed of a piece of equipment that cost $6,000 with accumulated depreciation of $4,500. The entry to record this disposal would include a debit to which account and for how much? Multiple choice question. Depreciation Expense - Equipment for $1,500 Accumulated Depreciation for $6,000 Equipment for $6,000 Loss on Disposal of Equipment for $1,500

Loss on Disposal of Equipment for $1,500

Forward Co. discarded a machine that cost $5,000 and was fully depreciated. The entry to record this transaction would include a credit to the _________ account. Multiple choice question. Loss on Disposal of Machinery Machinery Depreciation Expense - Machinery Accumulated Depreciation - Machinery

Machinery

Martinez Co. sells a machine that cost $10,000 with accumulated depreciation of $8,000 for $2,000 cash. The entry to record this transaction will recognize a gain or loss of how much? Multiple choice question. There is a gain of $2,000. There is a gain of $8,000. There is a loss of $2,000. There is no gain or loss. There is a loss of $8,000.

There is no gain or loss.

When an asset is sold for an amount that is above the asset's current book value, the company should record? Multiple choice question. neither a gain or loss. a gain on sale of equipment. a loss on sale of equipment.

a gain on sale of equipment.

A company owns an asset that is fully depreciated. The asset is no longer being used in operations and has no market value. The company has decided to ________ the asset by recording an entry to remove it from the balance sheet. Multiple choice question. depreciate discard take a loss on

discard

T. Chung Co. sold a computer for $500 cash. The computer cost $3,000 and had accumulated depreciation of $2,200 at the time of the sale. Chung will record the sale with an entry to the (Gain/Loss) _______ on Disposal of Equipment account in the amount of $_______

loss, 300