ACC101 EXAM #3 RFQT 17. The difference between the cost of an asset and the accumulated depreciation is usually called the: a. salvage value b. expired cost C. market value d. total cost e. book value 18. A machine was purchased on January 1, 2015 for $10,000 and was depreciated on a straight- line basis. The salvage value was estimated to be $1,000 and the useful life was estimated to be 10 years. If the asset is sold for $4,900 on July 1, 2020, there would be a: a. $500 gain b. $600 gain c. $ 150 loss d. $600 loss e. none of the above The following information relates to questions 19 and 20: Original asset purchased on 1/1/2015 $8,000 Original estimated salvage value $1,000 Estimated life of original asset 7 years Depreciation method straight-line Trade-in date 1/1/2018 Cash price of new asset $14,000 Cash to be paid with the trade-in $7,500 Trade-in amount $6,500 19. Before preparing the journal entry on the trade-in, the accountant calculated the gain or loss indicated by the above data and arrived at: a. $1,500 gain b. $1,000 gain c. $1,000 loss d. $0 e. none of the above 20. The accountant then prepared the journal entry debiting the new asset for: a. $7,500 b. $11,500 C. $12,500 d. $14,000 none of the above e 21. On January 1, 2020, Apex Co. has a $2,000 credit balance in the Allowance for Bad Debts account, and a zero balance in the Bad Debt Expense account. On January 4, 2020, Apex wrote off the $200 balance owed them by Nadir, Inc., a bankrupt company, The write-off entry caused: a. a decrease in the net realizable value of accounts receivable. b. an increase in the balance in the Allowance account. c. an increase in the balance in the Bad Debt Expense account. d. a decrease in the balance in the Allowance account. e. much weeping and gnashing of teeth. 22. On December 31, 2020, after the accounts are adjusted at the end of the fiscal year, selected accounts of Apex Co. show the following balances: Accounts Receivable $90,000 debit Allowances for Bad Debts 3,000 credit Bad Debts Expense 7,000 debit The expected realizable value of accounts receivable on December 31, 2020, amounts to: a. $94,000 b. $90,000 C. $87,000 d. $83,000 e. none of the above