a equipment was purchased for 800 000 on january 1 2014 it 421137

A) Equipment was purchased for $800,000 on January 1, 2014. It has an estimated useful life of 8 years and a residual value of $120,000. Depreciation is being computed using the straight line method. What amount should be shown for the Equipment, net of accumulated depreciation, in the company’s December 31, 2015 balance sheet?

a. $595,000.

b. $630,000.

c. $510,000.

d. $715,000.

B) Joe’s Copy Shop bought equipment for $60,000 on January 1, 2013. Joe estimated the useful life to be 3 years with no salvage value, and the straight line method of depreciation will be used. On January 1, 2014, Joe decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2014?

a. $10,000.

b. $15,000.

c. $20,000.

d. $8,000.

C) Wells Company’s delivery truck, with a cost of $56,000 was destroyed by fire. At the time of the fire, the balance of the Accumulated Depreciation account amounted to $38,000. The company received $32,000 reimbursement from its insurance company. The gain or loss as a result of the fire was

a. $14,000 gain.

b. $24,000 gain.

c. $24,000 loss.

d. $14,000 loss.