On September 1,2012,Algernon Company Sold a Truck for $15,000 Cash

question 143

Multiple Choice

On September 1,2012,Algernon Company sold a truck for $15,000 cash.The truck was originally purchased for $40,000,had an estimated salvage value of $4,000 and an estimated life of 6 years.Algernon had recorded depreciation of $30,000 through the end of 2011 using Straight-Line.First,Algernon had to update the depreciation prior to sale.Then Algernon recorded the sale transaction.What was the effect of that transaction on the net income of the company?

• A) No gain or loss
• B) Gain of $9,000
• C) Gain of $15,000
• D) Loss of $9,000

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Definitions:

Appellate Jurisdiction

The authority of a higher court to review and potentially change the decision of a lower court.

Appeal by Right

Appeal by right is a legal provision that allows a party to appeal a court decision to a higher court without needing special permission, based on statutory rights.

Discovery Stage

A pre-trial phase in a lawsuit where each party can obtain evidence from the other parties by means of discovery devices such as interrogatories, requests for production of documents, and depositions.

Peremptory Challenge Stage

A phase during jury selection in a trial where attorneys can reject a certain number of potential jurors without stating a reason.