On January 1, 2004,Bentham Company sells office furniture for $60,000 cash. The officefurniture orginally cost $150,000 when purchased on January 1,1997. Depreciation is recorded by the straight-line method over 10years with a salvage value of $15,000. What gain or loss on saleshould be recorded on this asset in 2004?
| $34,500 loss. |
| $75,000 loss. |
| $4,500 gain. |
| $19,500 gain. |
Bruno Companypurchased equipment on January 1, 2009 at a total invoice cost of$280,000; additional costs of $5,000 for freight and $25,000 forinstallation were incurred. The equipment has an estimated salvagevalue of $10,000 and an estimated useful life of five years. Theamount of accumulated depreciation at December 31, 2010 if thestraight-line method of depreciation is used is:
| $108,000. |
| $110,000. |
| $120,000. |
| $124,000. |
Equipment with aninvoice cost of $20,000 was placed in service on January 3, 2009.Installation costs of $8,000 were added to Repairs Expense. Thesecost should have been added to the Equipment account. Depreciationfor 2009 was computed using the straight-line method, and anestimated useful life of five years, with no salvage valueexpected. The net income reported for 2009 was:
| Understated $8,000. |
| Understated $6,400. |
| Overstated $1,600. |
| Overstated $6,400. |
