The Rollins Company purchased a delivery van on January 1, 2013 for $30,000. Rollins uses straight-line depreciation for the asset, which has a five year estimated useful life and a salvage value estimated at $6,000. The asset was sold on January 1, 2015 for $22,000 cash. Indicate whether each of the following items related to Rollins Company is true or false.
_____ a) Annual depreciation for Rollins' equipment was $6,000.
_____ b) Accumulated depreciation on January 1, 2015 was $9,600.
_____ c) Book value on January 1, 2015 was $20,400.
_____ d) On the date of the sale, Rollins will record a loss of $1,600.
_____ e) A gain or loss on the sale of a plant asset is reported on the balance sheet.

Question

Quizplus · Accepted Answer

The Answer of The Rollins Company purchased a delivery van on January 1, 2013 for $30,000. Rollins uses straight-line depreciation for the asset, which has a five year estimated useful life and a salvage value estimated at $6,000. The asset was sold on January 1, 2015 for $22,000 cash. Indicate whether each of the following items related to Rollins Company is true or false.
_____ a) Annual depreciation for Rollins' equipment was $6,000.
_____ b) Accumulated depreciation on January 1, 2015 was $9,600.
_____ c) Book value on January 1, 2015 was $20,400.
_____ d) On the date of the sale, Rollins will record a loss of $1,600.
_____ e) A gain or loss on the sale of a plant asset is reported on the balance sheet.

The Rollins Company Purchased a Delivery Van on January 1