John Morse Corporation Buys a Van for $16,000

question 11

Short Answer

John Morse Corporation buys a van for $16,000. The estimated life of the van is four years. The residual value of the van is $4,000. After two years, the van is sold for $8,000. What was the difference between the book value and the amount received from selling the van if John used the straight-line method of depreciation?

---

Definitions:

Inverted-U Function

A theory suggesting that performance increases with arousal up to an optimal point, beyond which further increases in arousal can lead to decreased performance.

Arousal

A physiological and psychological state of being awoken or stimulated to action.

Performance

The action or process of carrying out or accomplishing an action, task, or function, often measured against known standards.

Waking Thoughts

The ideas, reflections, and daydreams that occupy one's mind during moments of wakefulness.