An Asset Is Purchased on January 1 for $40,000

question 70

Multiple Choice

An asset is purchased on January 1 for $40,000.It is expected to have a useful life of five years after which it will have an expected salvage value of $5,000.The company uses the straight-line method.If it is sold for $30,000 exactly two years after its purchase,the company will record a:

• A)gain of $6,000.
• B)gain of $4,000.
• C)loss of $4,000.
• D)loss of $6,000.

Comprehend the calculations involved in production budgeting, including inventory planning.

Identify and explain various types of budgets within a master budget, including capital expenditures and operating budgets.

Calculate budgeted sales based on units and prices and understand the influence of growth rates on future sales.

Distinguish between operating and non-operating budgets within a company’s budgeting process.

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