While a agency sells device for coins on a date aside from the final day of the accounting duration, it must: the best solution is (c) first report depreciation fee for the duration as much as the date of sale.
The required details for Depreciation Expense in given paragraph
A depreciation fee is the quantity deducted from gross income to permit for a discount within side the price of some thing due to its age or how plenty it's been used. When you purchase and very own device, your commercial enterprise can be entitled to deduct a depreciation fee. Depreciation fee is suggested at the profits declaration as every other ordinary commercial enterprise fee. If the asset is used for manufacturing, the fee is indexed within side the working expenses place of the profits declaration. This quantity displays a part of the acquisition cost of the asset for manufacturing purposes.
For example, manufacturing unit machines which can be used to provide a apparel agency's predominant product have attributable sales and costs. To decide attributable depreciation, the agency assumes an asset lifestyles and scrap price.
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Complete question
When a company sells equipment for cash on a date other than the last day of the accounting period, it must:
Multiple Choice
a-record Depreciation Expense for the entire accounting period during which the equipment is sold.
b-record the disposal by reducing the Equipment account and increasing a revenue account; a gain or loss is reported if the decrease and increase are not equal.
c-first record Depreciation Expense for the period up to the date of sale, and then record the disposal by increasing Cash and decreasing both Equipment and Accumulated Depreciation; a gain or loss is reported if the proceeds from the sale do not equal the asset's book value.
d-record Accumulated Depreciation for the entire current accounting period.
