Accounting answer An asset's book value is $24,000 on September 30, Year 7. The asset has beendepreciated at an annual rate of $5,500 on the straight-line method. Assumingthe asset is sold on September 30, Year 7 for $27,500, the company shouldrecord:a. A gain on sale of $3,500.b. Neither a gain nor a loss is recognized in this type of transaction.c. A loss on sale of $3,500.d. A gain on sale of $5,500.e. A loss on sale of $2,000.

Step 1: Definition of Gain on Sale of AssetA Gain on Sale of Asset occurs when a company sells an…

Answered: An asset's book value is $24,000 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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Similar questions

An asset's book value is $18,600 on December 31, Year 5. Assuming the asset is sold on December 31, Year 5 for $14,400, the company should record: Multiple Choice A gain on sale of $13,200. Neither a gain nor a loss is recognized on this transaction. A loss on sale of $4,200. A loss on sale of $13,200. A gain on sale of $4,200.
Correct option? General accounting question
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.
An asset's book value is $36,000 on January 1, Year 6. The asset is being depreciated $500 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $25,000, the company should record: Multiple Choice O O O Neither a gain or loss is recognized on this type of transaction. A gain on sale of $2,000. A loss on sale of $1,000. A gain on sale of $1,000. A loss on sale of $2,000.
Merchant Company purchased land for a building site. The costs associated with the property were: $ 187,000 16,200 2,000 3,200 Purchase price Real estate commissions Legal fees. Expenses of clearing the land What is the total recorded cost of the land? Multiple Choice $208,400 $203,200 $187,000 $205.200
Lei Company acquired a financial asset at its market value of P4,800,000. Broker fees of P300,000 were incurred in relation to the purchase. At what amount should the financial asset initially be recognized if it is classified as: 1. At Fair value through profit or loss _________________ 2. As available for sale _____________________
Crane Inc. owns assets to which it applies the revaluation model (asset-adjustment method). The following additional information is available: 1. The depreciation expense for 2024 was $6780. 2. Between December 31, 2023, and December 31, 2024, the property's fair value had increased by $33900. 3. The December 31, 2024, balance in the revaluation surplus account (prior to any fair value adjustments) was $2260. The adjusted December 31, 2024, balance in the related contra-asset account will be ○ $11300. $15820. ○ $0. ○ $13560.
Choose the response that correctly states the amount of a seller's gain or loss on repossessed real property with a fair market value of $54,000 on the date of repossession. The unpaid balance of the installment obligation at the time of repossession is $56,000, the gross profit percentage is 25%, and the costs of repossession were $800. A) Loss of $13,200 B) Loss of $11,200 C) Gain of $11,200 D) Gain of $13,200 Kenisha spent a total of $115,000 to purchase a business, including $15,000 in legal fees for the preparation of the sales contract, and $100,000 paid to the seller. She received a building with a fair market value (FMV) of $70,000, land with an FMV of $10,000, and furniture and fixtures with an FMV of $20,000. What is Kenisha's basis in the building, land, and furniture? A) $70,000 building; $10,000 land; $20,000 furniture and fixtures. B) $75,000 building; $15,000 land; $25,000 furniture and fixtures. C) $80,500 building; $11,500 land; $23,000 furniture and fixtures. D)…
A fixed asset with a cost of $25,974 and accumulated depreciation of $23,377 is traded for a similar asset priced at $40,828 (fair market value) in a transaction with commercial substance. Assuming a trade-in allowance of $4,683, the cost basis of the new asset is Select the correct answer. $43,425 $38,742 $40,828 $36,145
Which of the following is a requirment regarding replacement property for a deferred like kind exchange A Replacement proepty must be identified within 3 years before the transfer of the TP propery. B. The tax return for the year of the trnsfer mqy no be filed before the replacemnt property is acquired C the value of identified replacemnt properties may not exceed 500% the aggre
Madison Company acquired a depreciable asset at the beginning of Year 1 at a cost of $12 million and 6 years useful life. At December 31, Year 1, Madison gathered the following information related to this asset: Fair value of the asset (net selling price) . . . . . . . . . . . . . . . . . . . . . . . . $7.5 million Sum of future cash ﬂows from use of the asset . . . . . . . . . . . . . . . . . . $10 million Present value of future cash ﬂows from use of the asset . . . . . . . . . . . $8 million Impairment loss of the asset at end of year 1 (if any) Select one:a. IFRS $0 and US GAAP: $ 2 millionb. IFRS $2.5 million and US GAAP $2 millionc. IFRS $2 million and US GAAP $0 million d. IFRS $4 million and US GAAP $0 million
If a company exchanges an asset with a book value of $260,000, an original cost of $500,000, and a fair value of $300,000 plus cash of $100,000 for a new asset, what is the gain or loss recognized on the transaction?

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