Depreciation Paper 2

1

In which of the following situations is the units-of-production method of depreciation most appropriate?






2

Under IFRS, according to the revaluation model, an item of property, plant, and equipment must be carried at






3

An entity sells a piece of machinery, for cash, prior to the end of its estimated useful life. The sale price is less than the carrying amount of the asset on the date of sale. The entry that the entity uses to record the sale is






4

An entity purchased a machine for $700,000. The machine was depreciated using the straight-line method and had a residual value of $40,000. The machine was sold on December 31, Year 1. The accumulated depreciation related to the machine was $495,000 on that date. The entity reported a gain on the sale of the machine of $75,000 in its income statement for the fiscal year ending December 31, Year 1. The selling price of the machine was






5

What is the journal entry recorded upon the sale of an item of property, plant, and equipment (PPE) that was sold for cash in excess of its carrying amount?






6

An entity sold a depreciable asset in the middle of the fifth year of its estimated 10-year useful life. The original cost of the asset was $100,000, and it was being depreciated on the straight-line basis. If the asset was sold for $80,000, the gain on the sale will be






7

To determine whether to recognize the impairment of a depreciable fixed asset, a company must compare the






8

An entity purchased a machine on January 1, Year 1, for $1,000,000. The machine had an estimated useful life of 9 years and a residual value of $100,000. The company uses straight-line depreciation. On December 31, Year 4, the machine was sold for $535,000. The gain or loss that should be recorded on the disposal of this machine is






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