Albatross Services Scrapped a Van

question 35

Multiple Choice

Albatross Services scrapped a van.The van originally cost $40,000,had an estimated salvage value of $1,000,and an estimated life of 10 years.At the time it was scrapped,it was fully depreciated.What was the effect of scrapping the van?

• A) Gain of $2,000
• B) No gain or loss
• C) Loss of $1,000
• D) Loss of $2,000

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Definitions:

Par Preferred Stock

Preferred shares issued at a stated value (par value), which typically determines the dividend payments and is considered during liquidation.

Journalize

The process of recording transactions in a journal, which includes detailing the financial transactions of a company in chronological order.

Earnings Per Share

A financial metric calculated by dividing the net earnings of the company by the number of outstanding shares of its common stock.

Financial Statement

A written record that conveys the business activities and the financial performance of a company, typically including the balance sheet, income statement, and cash flow statement.