Rupert Company purchased a delivery van on January 1, Year 1 for $45,000. Rupert uses the straight-line method for the asset, which has a five-year estimated useful life and a salvage value estimated at $9,000. On January 1, Year 3, the asset was sold for $33,300 cash. Indicate whether each of the following items related to Rupert Company is true or false.________ a) Annual depreciation for Rupert's equipment was $9,000.________ b) Accumulated depreciation at end of Year 2 was $14,400.________ c) Book value at end of Year 2 was $30,600.________ d) On the date of the sale, Rupert will record a loss of $2,400.________ e) A gain or loss on the sale of a plant asset is reported on the balance sheet.

What will be an ideal response?


a) F b) T c) T d) F e) F

a) This is false. Annual depreciation = ($45,000 ? $9,000 salvage) ÷ 5 years = $7,200 
b) This is true. Accumulated depreciation at end of Year 2 = 2 years × $7,200 annual depreciation = $14,400 
c) This is true. Book value at end of Year 2 = Cost of $45,000 cost ? Accumulated depreciation of $14,400 = $30,600 
d) This is false. Proceeds from sale of $33,300 price ? Book value of $30,600 = Gain on sale of $2,700 
e) This is false. Gains and losses are reported on the income statement (rather than on the balance sheet).

Business

You might also like to view...

The acceptable balance sheet classifications for deferred tax assets and deferred tax liabilities under GAAP and IFRS are GAAP IFRS I. current only noncurrent only II. current and noncurrent, respectively current and noncurrent, respectively III. noncurrent only current only IV. noncurrent only noncurrent only ?

A) I B) II C) III D) IV

Business

3D printing supports procurement.

Answer the following statement true (T) or false (F)

Business

The Railway Labor Act of 1926 applies to all of the following except:

A. Workers in the railway industry. B. Workers in the private airline industry. C. Workers in the trucking industry. D. Workers in the commercial airline industry.

Business

Residual income compares the division's actual operating income with the minimum operating income expected by top management for the given size of the division's average total assets

Indicate whether the statement is true or false

Business