Choose the best answer

Equipment purchased on January 1, 2020, for $10,000 with a 10 years useful life. Compute the equipment's Annual Depreciation Expense using the Straight-Line method. *

$10,000

$100,000

$1,000

$100

On November 1, 2019, Equipment has been purchased for $8,000 with a salve value of $200 and a useful life of 4 years. Compute the accumulated depreciation of the year 2019 under the Straight-Line method. *

$1,950

$525

$325

$8,325

PIC Company purchased equipment for $14,000. On March 1, 2020, the Company decided to retire the equipment. Its accumulated depreciation at the date of retirement is $9,800. Does the retirement cause a loss or gain on disposal and in what amount? *

Gain on Disposal of $4,200

Loss on Disposal of $4,200

Gain on Disposal of $23,800

Loss on Disposal of $23,800

On December 1, 2019, USB Company purchased a delivery truck for $25,000 and no salvage value. The truck is expected to be driven for 100,000 miles in total. In 2019, the truck has been driven for 5,000 miles. The company uses the Units of Activity method of depreciation. What is the amount of the Depreciation Expense of the year 2019? *

$5

$104

$1,250

None of the above

When a Company sells equipment for $3,000 while its Book Value is $5,000 and Cost is $12,000. The sale of the equipment results a: *

Loss on Disposal of $2,000 to be recorded on the debit side

Loss on Disposal of $2,000 to be recorded on the credit side

Gain on Disposal of $2,000 to be recorded on the debit side

Gain on Disposal of $2,000 to be recorded on the credit side

In the Adjusting Entry of the Depreciation of a certain year, the amount included is the amount of: *

Book Value

Depreciation Expense

Accumulated Depreciation

Depreciable Cost

When exchanging old equipment with a new one, a Gain on Disposal amount results when: *

Proceeds from Sale > Book Value of the old equipment

Cost of New Equipment > Book Value of the old equipment

Accumulated Depreciation > Book Value of the old equipment