11 safeguarding property plant and equipment includes all of the following except a 4300922

 

11) Safeguarding property, plant and equipment includes all of the following except:

A) training the operating personnel in the proper use of the assets

B) setting up security measures to prevent theft

C) separating custody of the assets from the accounting for the assets

D) assigning responsibility for the custody of the assets to the accountant

Table 10-8 Zane Manufacturing

 

On January 1, 2013, Zane Manufacturing Company purchased a machine for $40,000. The company expects to use the machine a total of 24,000 hours over the next 6 years. The estimated sales price of the machine at the end of 6 years is $4,000. The company used the machine 8,000 hours in 2013 and 12,000 in 2014.

 

12) Refer to Table 10-8. What is the journal entry to record the sale of the machine at the end of 2014 for $26,500 if the company uses straight-line amortization?

A)

Cash	26,500
Accumulated amortization, machine	6,000
Gain on sale of machine	7,500
Machine		40,000

 

B)

Cash	26,500
Accumulated amortization, machine	6,000
Loss on sale of machine	7,500
Machine		40,000

 

C)

Cash	26,500
Loss on sale of machine	1,500
Machine		28,000

 

D)

Cash	26,500
Accumulated amortization, machine	12,000
Loss on sale of machine	1,500
Machine		40,000

 

 

13) An asset was purchased for $12,000. The asset's estimated useful life was 5 years, and its residual value was $2,000. Straight-line amortization was used. How much gain or loss is reported if the asset is sold for $9,000 at the end of the first year?

A) $1,000 gain

B) $2,000 loss

C) No gain or loss

D) $1,000 loss

14) An asset was purchased for $12,000. The asset's estimated useful life was 5 years, and its residual value was $2,000. Straight-line amortization was used. How much gain or loss is reported if the asset is sold for $4,500 at the end of the third year?

A) $1,500 gain

B) $2,000 loss

C) No gain or loss

D) $1,500 loss

 

15) An asset was purchased for $12,000. The asset's estimated useful life was 5 years, and its residual value was $2,000. Straight-line amortization was used. How much gain or loss is reported if the asset is sold for $9,000 at the end of the second year?

A) $1,000 gain

B) $2,000 loss

C) No gain or loss

D) $1,000 loss

 

Match the following.

 

A) gain on disposal

B) loss on disposal

 

16) The account debited when cash received is less than the book value of the asset being sold