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Rupert Company Purchased a Delivery Van on January 1,Year 1

Question 88

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Rupert Company purchased a delivery van on January 1,Year 1 for $45,000.Rupert uses the straight-line method for the asset,which has a five-year estimated useful life and a salvage value estimated at $9,000.On January 1,Year 3,the asset was sold for $33,300 cash.Indicate whether each of the following items related to Rupert Company is true or false.

Premises:
Annual depreciation for Ruperts equipment was $9,000.
On the date of the sale,Rupert will record a loss of $2,400.
Accumulated depreciation at end of Year 2 was $14,400.
Book value at end of Year 2 was $30,600.
A gain or loss on the sale of a plant asset is reported on the balance sheet.
Responses:
True
False

Correct Answer:

Annual depreciation for Ruperts equipment was $9,000.
On the date of the sale,Rupert will record a loss of $2,400.
Accumulated depreciation at end of Year 2 was $14,400.
Book value at end of Year 2 was $30,600.
A gain or loss on the sale of a plant asset is reported on the balance sheet.
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