Gardner Corporation purchased a truck at the beginning of 2010 for $75,000. The truck is estimated to have a salvage value of $3,000 and a useful life of 120,000 miles. It was driven 18,000 miles in 2010 and 32,000 miles in 2011. What is the book value of the truck on December 31, 2011? Answer A. $55,800 B. $30,000 C. $42,000 D. $45,000 1 points Question 34 On April 1, 2010, O'Neill Co. purchased machinery for $120,000. Salvage value was estimated to be $5,000. The machinery will be depreciated over ten years using the double-declining balance method. If depreciation is computed on the basis of the nearest full month, determine the depreciation expense for the period January 1 thru December 31, 2011 on this machinery. Answer A. $20,550 B. $20,800 C. $20,400 D. $20,933 1 points Question 35 On January 1, 2009, a company acquired equipment for $120,000. The estimated life of the equipment is 5 years or 20,000 hours. The estimated residual value is $20,000. What is the amount of depreciation expense for 2011, if the company uses the double-declining-balance method of depreciation? Answer A. $14,400 B. $28,800 C. $17,280 D. $25,920 1 points Question 36 Empire Machinery acquired a new machine on January 1, 2006 at a cost of $50,000, which was estimated to have a useful life of 10 years, and a salvage value of $20,000. Straight-line depreciation was used. On January 1, 2012, management decided that the estimate of useful life had been too long and that the machinery would have to be retired after two more years, that is, at the end of the eighth year of service, but would retain its original salvage value. Under this revised estimate, calculate the depreciation expense for the seventh year of use. Answer A. $ 6,250 B. $ 5,000 C. $ 6,000 D. $10,000 1 points Question 37 Equipment costing $20,000 with a salvage value of $4,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 6 years, and no change in the salvage value, determine the depreciation expense for Year 3. Answer A. $3,000 B. $2,667 C. $2,000 D. $4,000 1 points Question 38 A company purchased a computer on January 1, 2010 for $20,000 cash. The computer is estimated to have a 5 year useful life, and no salvage value. On January 1, 2011, due to obsolescence, the computer is estimated to have only 2 years of remaining useful life, and the estimated salvage value after the 2 remaining years will be $2,000. Assuming straight line depreciation, the amount of depreciation expense to be recorded on December 31, 2011 will be: Answer A. $ 8,000 B. $ 6,000 C. $ 7,000 D. $10,000 1 points Question 39 A company sells a plant asset that originally cost $180,000 for $60,000 on December 31, 2010. The accumulated depreciation account had a balance of $90,000 after the current year's depreciation had been recorded. The company should recognize a: Answer A. $30,000 loss on disposal B. $60,000 loss on disposal C. $60,000 gain on disposal D. $30,000 gain on disposal 1 points Question 40 A truck that cost $18,000, was estimated to have a salvage value of $4,000, and was expected to last 10 years. At the end of 5 years of use (assume straight line depreciation), it was sold for $15,000, the journal entry to record the sale will involve a: Answer A. Credit to Gain on Sale for $8,000 B. Debit to Loss on Sale for $4,000 C. Credit to Truck for $11,000 D. Debit to Accumulated Depreciation - Truck for $7,000