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:

Mexican Government

The federal constitutional republic of Mexico, which is governed by a president and a bicameral legislature.

Fixed Exchange-Rate System

An exchange rate regime where a country's currency value is pegged to another currency, a basket of currencies, or a commodity like gold.

Local Currency

The currency that is legally accepted within a country and typically used for all financial transactions within that geographical boundary.

Flexible Exchange Rates

A system where the value of a currency is determined by the foreign exchange market, depending on the supply and demand for that currency.