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2) The depreciable cost of a plant asset equals the: A) historical cost of the asset minus the estimated residual value. B) historical cost of the asset minus accumulated depreciation. C) current replacement cost minus accumulated depreciation. D) historical cost of the asset plus the estimated residual value. 3) Which statement is FALSE? 0001215 A) Accumulated depreciation is a cash fund to be used to replace a plant asset when it wears out B) Depreciation is caused by the physical wear and tear of a plant asset. sotto How C) Depreciation is caused by obsolescence of a plant asset. TOM D) Depreciation is not based on changes in the market value of a plant asset. A 4) Gengler Company acquired three pieces of equipment for $1,600,000. Equipment #1 is appraised at $740,000, equipment #2 is appraised at $560,000 and equipment #3 is appraised for $720,000. The cost of equipment #1 is: (Do not round any intermediary calculations, and round your final answer to the nearest dollar.) A) $740,000 B) $342,250. C) $586, 139 D) $271,089 5) If the market interest rate is 6%, a $10,000,7%, 5-year bond, that pays interest semiannually would sell at an amount: A) less than the maturity value. B) greater than face value. TOP C) equal to face value. D) less than face value. 6) A company purchased a machine for $200,000. The accumulated depreciation on the machine is now $130,000. The machine is junked which means that they received no cash on disposal. Which joumal entry is prepared to record the disposal? A) debit Accumulated Depreciation - Machine for $130,000 and credit Machine for $130,000 B) debit Accumulated Depreciation - Machine for $200,000, credit Machine for $130,000 and credit Gain on Disposal of Machine for $70,000 C) debit Loss on Disposal of Machine for $70,000, debit Accumulated Depreciation - Machine $70,000 and credit Machine for $140,000 D) debit Loss on Disposal of Machine for $70,000, debit Accumulated Depreciation - Machine for $130,000 and credit Machine for $200,000