Use the following information for questions

-Abcor Corporation uses the cost model to account for its PP&E assets.The assets were acquired on January 1, 2010.The following additional information is available: Assuming Abcor did not experience any impairment losses, the 2011 net carrying value of the assets is
A)$87,500
B)$78,750
C)$70,000
D)$68,000

Question

Use the following information for questions 
 
-Abcor Corporation uses the cost model to account for its PP&E assets.The assets were acquired on January 1, 2010.The following additional information is available:  Assuming Abcor did not experience any impairment losses, the 2011 net carrying value of the assets is
A)$87,500 
B)$78,750 
C)$70,000 
D)$68,000

Quizplus · Accepted Answer

Since Abcor Corporation uses the cost model to account for its PP&E assets and did not experience any impairment losses, the net carrying value of the assets is simply the acquisition cost of $100,000, less accumulated depreciation of $30,000 ($10,000 per year for 3 years since the assets were acquired on January 1, 2010). Therefore, the net carrying value at the end of 2011 is $70,000 (A-C+D = $70,000).

Use the Following Information for Questions