Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

8. Long Lived Assets

Sale of Plant Assets

Financial Accounting

8. Long Lived Assets

Sale of Plant Assets

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Multiple Choice

The amount of the gain on the sale of equipment equals:

The cash received from the sale plus the equipment's book value

The equipment's book value minus the cash received from the sale

The equipment's original cost minus accumulated depreciation

The cash received from the sale minus the equipment's book value

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Verified step by step guidance

Understand the concept of 'gain on sale of equipment': A gain occurs when the cash received from selling an asset exceeds its book value. The book value is the original cost of the equipment minus accumulated depreciation.

Identify the formula for calculating the gain: Gain = Cash received from the sale - Book value of the equipment.

Determine the book value of the equipment: Book value = Original cost of the equipment - Accumulated depreciation.

Substitute the book value into the gain formula: Gain = Cash received from the sale - (Original cost - Accumulated depreciation).

Ensure all values (cash received, original cost, and accumulated depreciation) are correctly identified and substituted into the formula to calculate the gain.