A company has long-lived tangible assets with a cost of $3.5 million; its Accumulated Depreciation account has a balance of $1.1 million.Which of the following statements is correct?
A) The book value of long-lived assets is $2.4 million.
B) The market value of long-lived assets is $3.5 million.
C) The carrying value of long-lived assets is $3.5 million.
D) The resale value of long-lived assets is $2.4 million.

Question

Quizplus · Accepted Answer

The book value of long-lived assets is calculated as the cost of the assets minus the accumulated depreciation. Therefore, the book value of long-lived assets in this case is $3.5 million - $1.1 million = $2.4 million. Option A is the correct statement. Option B is incorrect because market value can be different from cost or book value. Option C uses the term "carrying value", which is not commonly used for long-lived assets. Option D implies a resale value, which is not given in the question, and may or may not be equal to the book value.

A Company Has Long-Lived Tangible Assets with a Cost of $3.5