Nicklaus Company Has Decided to Sell One of Its Old

question 12

Multiple Choice

Nicklaus Company has decided to sell one of its old machines on June 30, 2011.The machine was purchased for $120,000 on January 1, 2007, and was depreciated on a straight-line basis for 10 years with no residual value.If the machine was sold for $39,000, what was the amount of the gain or loss recorded at the time of the sale?

• A)$27,000.
• B)$81,000.
• C)$33,000.
• D)$69,000.

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Definitions:

Allowance For Uncollectibles

A balance sheet account estimating the portion of receivables that a company does not expect to collect.

Net Realizable Value

Net Realizable Value is the estimated selling price of goods, minus the cost of their sale or disposal, representing the actual value of assets in terms of cash.

Estimated Future Returns

Projections or forecasts of the financial returns a company expects to receive from investments, assets, or business activities in the future.

End-Of-Period Accrual

Accounting adjustments made at the end of accounting periods to record revenues earned and expenses incurred but not yet recorded.