Reference no: EM132672613

Problem 1: A plant asset with a cost of $900,000 and accumulated depreciation of $800,000 is sold for $80,000. What is the amount of the gain or loss on disposal of the plant asset?

a. $20,000 loss.

b. $80,000 loss.

c. $80,000 gain.

d. $20,000 gain.

Problem 2: Equipment with a cost of $450,000 has an estimated salvage value of $30,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

a. $112,500.

b. $105,000.

c. $113,400.

d. $108,750.

Problem 3: Equipment with a cost of $450,000 has an estimated salvage value of $30,000 and an estimated life of 4 years or 10,000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 2,700 hours?

a. $112,500.

b. $105,000.

c. $113,400.

d. $108,750.