A Company Sells a Long-Lived Asset Which Originally Cost $150,000

question 58

Multiple Choice

A company sells a long-lived asset which originally cost $150,000 for $50,000 on December 31, 2014. The accumulated depreciation account had a balance of $60,000 after the current year's depreciation of $15,000 had been recorded. The company should recognize a

• A) $100,000 loss on disposal.
• B) $40,000 gain on disposal.
• C) $40,000 loss on disposal.
• D) $25,000 loss on disposal.

Identify the role of the required reserve ratio in the banking system and its effect on money creation.

Explain the process of money creation by commercial banks through lending.

Distinguish between the concepts of excess reserves and required reserves and their importance in the money supply.

Analyze the effects of holding cash versus depositing in banks on the money supply.

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Definitions:

Internal Causes

Reasons or factors within an organization or individual that lead to a specific effect or outcome, contrasting with external influences.

External Causes

Factors or circumstances outside of one's control that influence events or outcomes.

Perceivers

Individuals who interpret, process, and assign meaning to information and stimuli they receive from the environment.

Behavior

The behavior or responses of a person in reaction to outside or inside triggers.