Fundamental Accounting Principles Volume 2 17th Edition By Kermit D. Larson test bank

       E) A gain on sale of $13,350.
      






220)       An asset's book value is $25,200 on January 1, Year 6. The asset is being depreciated $350 per month using the straight-line method. Assuming the asset is sold on July 1, Year 7 for $16,900, the company should record:



      
       A) Neither a gain or loss is recognized on this type of transaction.     
       B) A gain on sale of $2,000.
       C) A loss on sale of $1,000.
       D) A gain on sale of $1,000.
       E) A loss on sale of $2,000.
      






221)       A company sold equipment that originally cost $360,000 for $180,000 cash. The accumulated depreciation on the equipment was $180,000. The company should recognize a:



      
       A) $180,000 gain.     
       B) $180,000 loss.
       C) $90,000 loss.
       D) $0 gain or loss.
       E) $90,000 gain.
      






222)       A company discarded a computer system originally purchased for $9,000. The accumulated depreciation was $6,200. The company should recognize a (an):



      
       A) $0 gain or loss.    
       B) $2,800 loss.
       C) $2,800 gain.
       D) $9,000 gain.
       E) $6,200 loss.
      






223)       A company sold a tractor that originally cost $127,000 for $22,000 cash. The accumulated depreciation on the tractor was $61,800. The company should recognize:



      
       A) A loss of $43,200.
       B) A gain of $43,200.
       C) A loss of $22,000.
       D) A gain of $65,200.
       E) A gain of $22,000.
      






224)       A company purchased a tract of land for its natural resources at a cost of $1,772,000. It expects to mine 2,100,000 tons of ore from this land. The salvage value of the land is expected to be $260,000. The depletion expense per ton of ore is:



      
       A) $0.720.   
       B) $6.815.
       C) $8.077.
       D) $0.968.
       E) $0.844.
      






225)       A company's old machine that cost $54,000 and had accumulated depreciation of $42,600 was traded in on a new machine having an estimated 20-year life with an invoice price of $65,400. The company also paid $55,600 cash, along with its old machine to acquire the new machine. If this transaction has commercial substance, the new machine should be recorded at:



      
       A) $67,000. 
       B) $54,000.
       C) $65,400.
       D) $11,400.
       E) $63,800.
      






226)       Hunter Sailing Company exchanged an old sailboat for a new one. The old sailboat had a cost of $210,000 and accumulated depreciation of $105,000. The new sailboat had an invoice price of $230,000. Hunter received a trade in allowance of $115,000 on the old sailboat, which meant the company paid $115,000 in addition to the old sailboat to acquire the new sailboat. If this transaction has commercial substance, what amount of gain or loss should be recorded on this exchange?