An Asset That Was Originally Purchased for $46,000 Has an Estimated

question 79

Multiple Choice

An asset that was originally purchased for $46,000 has an estimated salvage value of $4,000 and a 7 year life. The depreciation on the asset has been properly recorded through the end of Year 2 using the straight-line method. Assuming the asset is sold on March 31 of Year 3, what is the appropriate amount of depreciation to record before accounting for the disposal?

• A)$6,000.
• B)$1,500.
• C)$4,500.
• D)$1,643.
• E)No entry is needed prior to recording the disposal.

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Definitions:

Units Sold

The total quantity of products sold by a company during a specific period.

Variable Cost

Variable expenses that are closely aligned with the level of production or the volume of sales, for example, raw materials and direct labor.

Total Variable Cost

The total of all expenses that fluctuate based on the amount of goods produced or sold, including raw materials and wages for workers directly involved in production.

Units Sold

The total quantity of a company's product that has been purchased by customers during a specific period.