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

      
       A) $115,000 gain      
       B) $0 gain or loss
       C) $10,000 gain
       D) $10,000 loss
       E) $105,000 loss
      






227)       Cliff Company traded in an old truck for a new one. The old truck had a cost of $82,000 and accumulated depreciation of $65,600. The new truck had an invoice price of $132,000. Huffington was given a $13,120 trade-in allowance on the old truck, which meant they paid $118,880 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck?



      
       A) $16,400  
       B) $82,000
       C) $118,880
       D) $132,000
       E) $135,280
      






228)       A company bought a new $64,000 heating system. The company paid $60,600 cash and was given a trade-in of $3,400 on an old heating system. The old system had an original cost of $57,800 and accumulated depreciation of $52,200. If the transaction has commercial substance, the company should record the new heating system at:



      
       A) $3,400.   
       B) $5,600.
       C) $60,600.
       D) $64,000.
       E) $66,200.
      






229)       A company purchased equipment valued at $120,000. It traded in old equipment for a $95,000 trade-in allowance and the company paid $25,000 cash with the trade-in. The old equipment cost $110,000 and had accumulated depreciation of $33,000. This transaction has commercial substance. What is the recorded value of the new equipment?



      
       A) $77,000. 
       B) $95,000.
       C) $25,000.
       D) $102,000.
       E) $120,000.
      






230)       Granite Company purchased a machine costing $136,620. Granite paid freight charges of $3,800. The machine requires special mounting and wiring connections costing $11,800. When installing the machine, $3,300 in damages occurred. Compute the cost recorded for this machine.



      
       A) $160,000.      
       B) $152,220.
       C) $136,620.
       D) $152,420.
       E) $151,720.
      






231)       Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $117,000. The machine's useful life is estimated to be 10 years, or 130,000 units of product, with a $3,000 salvage value. During its second year, the machine produces 10,400 units of product. Determine the machines' second year depreciation under the straight-line method.



      
       A) $9,120.   
       B) $11,400.
       C) $11,700.
       D) $9,360.
       E) $12,000.
      






232)       Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $82,000. The machine's useful life is estimated to be 10 years, or 260,000 units of product, with a $8,000 salvage value. During its second year, the machine produces 20,800 units of product. Determine the machines' second year depreciation under the units-of-production method. (Do not round intermediate calculations.)