Loss on sale of plant and machineryshould be written off against:Depreciation fund accountSales accountShare premiumProfit & Loss AccountA trader purchased a machinery for- 10,000 in Jan 2004. Depreciation ischarged @ 25% diminishing balance.At the end of third year it was soldfor - 1,000. Profit or Loss on sale ofmachine will be: (write the questionand explain your solution in detailson paper then upload it at the end ofthe exam)Loss - 2,406Loss - 3,219Profit - 2,300Profit 2,400II

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Answered: Loss on sale of plant and machinery…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A gain or loss on the sale of a plant asset is determined by comparing the: A. Asset's original cost with the sales proceeds B. Asset's book value with the sales proceeds C. Asset's original cost with the asset's book value. D. Initial estimate of the asset's salvage value with the sales proceeds. E. None of these.
Assume an income statement with the following classifications: RevenuesCost of goods soldDistribution expensesGeneral & administrative expensesOther revenues and expensesIncome tax on income from continuing operationsGain from disposal of discontinued operationsIncome tax on gain from discontinued operationsNone of the above Indicate by letter how each of the following should be classified: Advertising expenseAmortization of a patent held as an investmentCash dividend received on short-term investmentDepreciation on plant that manufactures good for sale (prior to sale of the goods)Freight on salesIncome tax effect of loss on sale of plantIncome tax on gain on sale of short-term investment in securitiesInterest expenseInterest revenueLoss on sale of patentDividend revenue from investmentSalary of company presidentSalesSales returnsServices sold
One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant & equipment subsequent to initial recognition. Read IAS 16 and answer the following questions. Provide a list of the references you have used to search this topic. 1) What are the accounting models accepted under IFRS for the measurement of property, plant & equipment subsequent to initial recognition? 2) How often should the company revalue its property, plant & equipment under the revaluation model? 3) How should the revaluation gains and losses be accounted for and reported in the financial statements? 4) How should any claim for compensation from third parties for impairment be accounted for? 5) How should the recoverability of the carrying amount of property, plant & equipment be accounted for?
Property, plant and equipment (fixed assets) assets are depreciated because: a. The accrual basis of accounting requires matching of costs to revenues. b. Cash basis of accounting requires depreciation. c. The book values equal market values. d. The replacement cost of plant assets may fluctuate over time.
How would accumulated depreciation be classified on the balance sheet? current asset fixed asset current liability O long term liability
For accounting purposes, depreciation refers to the process of ________. A. estimating an asset's current market value B. allocating the cost of a plant asset to expense over its useful life C. recording the decline in the market value of an asset to its book value D. determining the selling price of an asset
A manufacturing plant use for manufacturing a discontinued product is classified on the balance sheet as... Group of answer choices Inventory Other Assets Long-Term Investment Property, Plant, and Equipment
All financial assets are initially measured at fair value plus transaction costs, except A. Amortized cost C.None of these C. Fair value through profit and loss D. Fair value through OCI
Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable asset
Explain how depreciation expense satisfies the definition of an expense
Which of the following expenditures would be included in the cost of a fixed asset? Oa. Sales taxes Ob. Vandalism Oc. Uninsured theft Od. Mistakes in installation

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Loss on sale of plant and machinery should be written off against: Depreciation fund account O Sales account Share premium Profit & Loss Account