a. Potter Trucking purchased a tractor trailer for $175,000. Interline uses the units-of-activity method for depreciating its trucks and expects to drive the truck 750,000 miles over its 10-year useful life. Salvage value is estimated to be $25,000. If the truck is driven 100,000 miles in its first year, how much depreciation expense should Potter record?

a. $12,250

b. $15,000

c. $17,500

d. $20,000

A company sells a plant asset which originally cost $400,000 for $250,000 on December 31, 2020. The Accumulated Depreciation account had a balance of $165,000 after the current year's depreciation of $25,000 had been recorded. The company should recognize a

a. $15,000 gain on disposal.

b. $15,000 loss on disposal.

c. $40,000 gain on disposal.

d. $40,000 loss on disposal.

A truck that cost $80,000 and on which $70,000 of accumulated depreciation has been recorded was disposed of for $7,500 cash. The entry to record this event would include a

a. gain of $2,500.

b. loss of $2,500.

c. credit to the Equipment account for $10,000.

d. credit to Accumulated Depreciation for $70,000.