RP&A,Inc Purchased Some Fixed Assets Four Years Ago at a Cost

question 21

Multiple Choice

RP&A,Inc. purchased some fixed assets four years ago at a cost of $19,800. It no longer needs these assets so is going to sell them today at a price of $3,500. The assets are classified as 5-year property for MACRS. What is the current book value of these assets?

• A) $1,140.48
• B) $3,421.44
• C) $3,500.00
• D) $4,016.67
• E) $5,702.40

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Definitions:

Stockholders' Equity

The remaining interest in a company's assets after all liabilities are subtracted, indicating ownership.

Real Accounts

Accounts that represent assets, liabilities, and equity, remaining open to accumulate financial information over several periods.

Liabilities

Financial obligations or debts that an entity owes to others, which are expected to be settled over time through the transfer of economic benefits.

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded against a fixed asset since it was acquired and put into use.