Ace Corporation sold equipment for $12,000. The equipment had an original cost of $36,000 and accumulated depreciation of $18,000. As a result of the sale, a. net income will increase by $12,000. b. net income will increase by $6,000. c. net income will decrease by $6,000. d. net income will decrease by $12,000.

Ace Corporation sold equipment for $12,000. The equipment had an original cost of $36,000 and accumulated depreciation of $18,000. As a result of the sale, a. net income will increase by $12,000. b. net income will increase by $6,000. c. net income will decrease by $6,000. d. net income will decrease by $12,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 4RE: Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000...

See similar textbooks

Similar questions

Macey Co. exchanged a piece of equipment that had cost $40,000 (now 75% depreciated) for a truck with a current appraised value of $15,000. Macey Co. gave the other company the piece of equipment and $8,000. Macey Co. should record a. a $3,000 lossb. the truck at $18,000c. a gain of $11,000d. the truck at $23,000
??
An asset which costs $25,000 and has accumulated depreciation of $6,000 is sold for $11,000. What amount of gain or loss will be recognized when the asset is sold? a. A gain of $14,000 b. A loss of $14,000 c. A gain of $8,000 d. A loss of $8,000
You are an accountant for ABC Corp. Your purchasing department has procured products invoiced for $25,000 with 2/10 Net 30 terms. If you pay the invoice within 15 days, your payment would be: $25,500. $20,000. $24,500. $25,000. Accounting depreciation systematically allocates the cost of an asset in time over its useful life while economic depreciation deals with: The estimated loss of value of an asset minus the revenue it produces. The estimated salvage value of an asset at its end-of-life. The change of an asset’s value based on fair market price. The value of an asset matched to the revenue it creates indirectly.
Slipper Company sold a productive asset, a machine, for cash. It originally cost Slipper $20,000. The accumulated depreciation at the date of disposal was $15,000. A gain on the disposal of $2,000 was reported. What was the asset's selling price?
A truck costs $82,000 when new and has accumulated depreciation of $70,000. Suppose Frank Towing exchanges the truck for a new truck. The new truck has a market value of $79,000, and Frank pays cash of $52,000. Assume the exchange has commercial substance. What is the result of this exchange? OA. No gain or loss OB. Gain of $15,000 OC. Gain of $67,000 OD. Loss of $15,000
At the beginning of the year jimmy jones company purchased a machine for $35,000. The following expenditures were incurred. . Freight = $ 1,200 .Insatallation = 1,200 .property tax on the machine for the first year = $ 750 The machine is estimated to have a useful life of 7 years and a residual value of $2,500 1. What is the initial cost of the machine? 2.what is the double decling depreciation of year 1 and 2? 3.What is the straight line depreciation of year 1 and year 2? 4.If Jimmy decides to sum of the years digits depreciation, what is the depreciation of year 1 and year 2.?
1. A bookkeeper in error recorded the purchase cost of a new item of equipment as GHC36,000 when it should have been GHC360,000. A draft profit of GHC2,560,000 for the period was calculated before the discovery of the error. This included a depreciation charge of 10% (GHC3,600) for the equipment. What is the correct figure for profit?
Warren Company purchased a truck for $54,000. Sales tax amounted to $5,400; shipping costs amounted to $1,200, and one-year registration of the truck was $100. What is the total amount of costs that should be capitalized? Select one: $59,400 $60,600 $66,100 $54,000
NOS Corp. purchased equipment for $180,000. They sold the equipment at the end of three years for $147,000. If the expected useful life of the equipment was ten years with a residual value of $30,000, and they use straight-line depreciation, which of the following is true regarding the journal entry to record the sale of the equipment? Select one: a. Credit Gain on Sale for $23,000 b. Credit Gain on Sale for $6,000 c. Credit Gain on Sale for $9,000 d. Credit Gain on Sale for $3,000 e. Credit Gain on Sale for $12,000
What is the depreciation rate for this accounting question?
Daly Publishing Corporation recently purchased a truck for $43,000. Under MACRS, the first year's depreciation was $8,600. The truck driver's salary in the first year of operation was $61,800. The company's tax rate is 30 percent. Required: 1-a. Calculate the after-tax cash outflow for the acquisition cost and the salary expense. 1-b. Calculate the reduced cash outflow for taxes in the first year due to the depreciation. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Calculate the after-tax cash outflow for the acquisition cost and the salary expense. After-Tax Cash Outflow Acquisition cost Salary expense