Kelly Petroleum Products Owns Fully Depreciated Furniture That Was Purchased

question 166

Multiple Choice

Kelly Petroleum Products owns fully depreciated furniture that was purchased for $26,500.The furniture had an estimated useful life of 8 years and an estimated residual value of $2,500.The furniture was sold for $2,700.Which of the following is the correct entry to record the transaction?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Accumulated depreciation } & 26,500 & \\
• \hline \text { Cash } & 2,700 & \\
• \hline \text { Gain on sale } & & 2,700 \\
• \hline \text { Furniture } & & 26,500 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Accumulated depreciation } & 24,000 & \\
• \hline \text { Cash } & 2,700 & \\
• \hline \text { Gain on sale } & & 200 \\
• \hline \text { Furniture } & & 26,500 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Furniture } & 26,500 & \\
• \hline \text { Gain on sale } & 200 & \\
• \hline \text { Cash } & & 2,700 \\
• \hline \text { Accumulated depreciation } & & 24,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Furniture } & 2,000 & \\
• \hline \text { Cash } & 2,700 & \\
• \hline \text { Loss on sale } & 19,300 & \\
• \hline \text { Accumulated depreciation } & & 24,000 \\
• \hline
• \end{array}\]