41. On December 31, Reach It Batting Cages Company has de batting cages for another on the cages for another one that has a str o n The seller of the bat Willing to allow a trade-in amount of $40.000 The initial cost of the old og $225,000 with an accumulated depreciation of $195,000. Des end of the year. The difference will be paid in cash What is the amount of the yo depreciation of $195.000 Depreciation has been taken up to the this transaction? ges Company has decided to trade-in one of its 00.000. The seller of the batting cage is 40,000. The initial cost of the old equipment was n cash. What is the amount of the gain or loss on a. The gain will not be He gain will not be recognized and will be added to the price of the old equipment b. The gain will not be recognized and will be added to the price of the new egu c. The gain will not be recognized and will be subtracted from the too recognized and will be subtracted from the price of the old equipment w equipment d. The gain will not be recognized and will be subtracted from the price of the new equipme ded to the price of the new equipment 42. On December 31, Reach It Bettina Canes Company has decided to trade-in one of its batting cages for another one that has a cost of $500.000. The seller of the batting cage is willing to allow a trade-in amount of $12.000. The initial cost of the old equipment was $225,000 with an accumulated depreciation of $195 000 Depreciation has been taken up to the end of the year. The difference will be paid in cash What is the amount of the gain or loss on this transaction? a. Loss of $12,000 b. Gain of $12,000 c. Loss of $18,000 d. No loss or gain will be recorded. 43. When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry: a. debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Disposal b. debit Machinery and Accumulated Depreciation; credit Machinery and Cash c. debit Cash and Machinery, credit Accumulated Depreciation d. debit Cash and Machinery, credit Accumulated Depreciation and Machinery 44. Miller Co. issued a $35.000, 60-day, discounted note to River City Bank. The discount rate is 6%. What is the maturity value of the note? a. $35,350 b. $37,100 c. $35,000 d. $34,650 45. When determining whether to record an asset as a fixed asset, what two criteria must be met? a. Must be an investment and must be long lived. b. Must be long lived and must use the asset in a productive manner c. Must be long lived and must be a tangible asset. d. Must be a tangible asset and must be an investment
