1. Gorham Company has equipment with an original cost of $250,000 and accumulated depreciation of $140,000. If the equipment was sold it would generate a $15,000 Gain. What is the current fair value of the equipment?

A) $150,000

B) $110,000

C) $140,000

D) $125,000

2. Which of the following statements is correct?

A) firms must use the same depreciation methods for tax and financial reporting

B) return on assets based on reported values tends to be overstated

C) all the assets a firm owns are reported on its balance sheet

D) plant assets are reported at fair market value