On February 1, 2013, James Co

question 86

Multiple Choice

On February 1, 2013, James Co., which uses straight-line depreciation, purchased equipment for $88,000 with a useful life of 12 years and $4,000 salvage value. On February 1, 2017, the equipment was sold for $56,000. Which of the following would James recognize as a result of this disposition?

• A)$7,000 loss
• B)$4,000 loss
• C)$4,000 gain
• D)No gain or loss

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Definitions:

Mass Consumption

A societal pattern where a large number of consumers purchase significant quantities of goods and services.

Great Depression

A severe worldwide economic depression that took place mostly during the 1930s, originating in the United States.

President Eisenhower

Dwight D. Eisenhower was the 34th President of the United States, serving from 1953 to 1961, known for his leadership during World War II as a five-star general and his role in domestic infrastructure expansion, notably the Interstate Highway System.

Motor Vehicles

Wheeled vehicles powered by engines or electric motors, used for transportation, such as cars, motorcycles, and trucks.