A Fixed Asset with a Cost of $41,000 and Accumulated

question 113

Multiple Choice

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,000, the recognized loss on the trade is

• A) $3,000
• B) $4,500
• C) $500
• D) $1,500

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Definitions:

Deed

A legal document that represents the ownership of real estate or property, which is transferred from one party to another.

Accession

The process or act of acquiring an increase, typically referring to the acquisition of new territory, property, or rights.

Personal Property

Property that is not attached to real estate and includes movable objects like furniture, cars, and jewelry.

Air-Conditioning System

A mechanism designed for controlling the temperature, humidity, and purity of air in an enclosed space.