Mercury Company Reports Depreciation Expense of $40,000 for Year 2

question 120

Multiple Choice

Mercury Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing $150,000 was sold for its book value in Year 2. There were no other equipment purchases or sales during the year. The following selected information is available for Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.
$\begin{array}{|l|l|l|}\hline \text { At December 31 } &{\text { Y ear 2 }} & \text { Y ear 1 } \\\hline \text { Equipment } & \$ 600,000 & \$ 750,000 \\\hline \text { Accumulated Depreciation-Equipment } & 428,000 & 500,000\\\hline\end{array}$

• A)$68,000.
• B)$32,000.
• C)$38,000.
• D)$36,000.
• E)$40,000.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values around the mean.

Sample Size

The number of observations or data points collected from a subset of a population for the purpose of statistical analysis.

Confidence Interval

A range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter, expressed at a certain level of confidence.

Sample Size

Refers to the total count of individual samples or observations used in a statistical study, essential for achieving accurate results.