Question 1. Plant assets are:
- tangible assets used in the operation of a business that have a useful life of more than one accounting period.
- current assets.
- held for sale.
- intangible assets used in the operations of a business that have a useful life of more than one accounting period.
Question 2. An asset's book value is $36,000 on January 1, 2007. The asset is being depreciated at a rate of $500 per month on the straight-line method. Assuming the asset is sold on July 1, 2008 for $25,000, the company should record:
- neither a gain nor loss is recognized on this type of transaction.
- a gain on sale of $2,000.
- a gain on sale of $1,000.
- a loss on sale of $2,000.