When a fully depreciated asset is still in use:

Select one:

a. The accrued portion of accumulated depreciation should remain unchanged and no more depreciation should be taken.

b. Prior years' depreciation should be adjusted.

c. It should be written off the books.

d. The cost should be adjusted to market value.

e. Part of the depreciation should be reversed.

Question 8

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A truck costing $45,000 and having an estimated salvage value of $4,500 and an original life of five years is exchanged for a new truck. The cash price of the new truck is $57,000. A trade-in allowance of $22,500 is received for the old truck and the difference is paid in cash. The old truck has been depreciated for three years using the straight-line method. The new truck would be recorded at:

Select one:

a. $57,000.

b. $34,500.

c. $55,200.

d. $43,200.

e. None of these.

Question 9

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Land containing a mine having an estimated 1,000,000 tons of economically extractable ore is purchased for $375,000. After the ore deposit is removed, the land will be worth $75,000. If 100,000 tons of ore are mined and sold during the first year, the depletion cost charged to expense for the year is:

Select one:

a. $30,000.

b. $35,000.

c. $375,000.

d. None of these.

e. $300,000.

f. $37,500.