Can you please give true answer? An asset's book value is $19,000 on December 31, Year 5. Theasset has been depreciated at an annual rate of $4,000 on thestraight-line method. Assuming the asset is sold onDecember 31, Year 5 for $16,000, the company should record:a. A loss on sale of $3,000.b. Neither a gain nor a loss is recognized in this type oftransaction.c. A gain on sale of $3,000.d. A gain on sale of $3,000.e. A loss on sale of $3,000.

Understanding the Problem:Book value: $19,000Selling price: $16,000 Steps:Compare selling price to…

Answered: An asset's book value is $19,000 on…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 11MCQ

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Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
An asset's book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line method. Assuming the asset is sold on December 31, Year 5 for $15,000, the company should record: A. A loss on sale of $12,000. B. A gain on sale of $12,000. C. Neither a gain nor a loss is recognized on this transaction. D. A gain on sale of $3,000. E. A loss on sale of $3,000.
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On January 1, 2023, an entity acquired an item of property, plant and equipment at a cost of P100,000. The asset had an estimated residual value of P10,000 and a useful life of 10 years. The company uses straight-line method of depreciation computed to the nearest month. On October 1, 2026, the asset was reclassified as “held for sale” under the strict criteria of IFRS 5. Its fair value on this date was P50,000 and the cost to sell was estimated at P2,000. These estimates were considered valid on December 31, 2026. In January 2027, the asset was sold for P50,000 and disposal costs incurred amounted to P3,000. How much is the impairment loss reported in profit or loss for the year 2026?

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