Use the Information Above to Answer the Following Question

question 27

Multiple Choice

Use the information above to answer the following question.Assume the company decides to sell the computer system on July 1,2015 for $1,000,000.Which of the following is not true concerning the journal entry(ies) required on July 1?

• A)The depreciation expense must be recorded for 6 months,January 1 to July 1.
• B)The Computer System asset account must be credited for $1,600,000 to record the sale.
• C)The amount of the debit to accumulated depreciation at the date of sale is $612,500.
• D)The loss on the sale is $12,500.

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Definitions:

Financial Statements

Written records that convey the business activities and financial performance of a company, including the balance sheet, income statement, and statement of cash flows.

Statement of Stockholders' Equity

The statement of stockholders' equity is a financial document that shows changes in the value of a company's equity over a specific period, including elements like issued shares and retained earnings.

Dividend

A payout of a portion of a company's earnings to its shareholders, typically in the form of cash or stock.

Sole Proprietorship

Sole Proprietorship is a business structure owned and operated by one individual, where there is no legal distinction between the owner and the business.