Question

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

Answer 1

Answer:

A. The book value of long-lived assets is $2.4 million.

Explanation:

Given data :

The cost of the long-lived tangible assets  = $ 3.5 million

Amount of depreciation account = $ 1.1 million

Therefore, the book value of the long lived asset is defined as the cost of the asset minus the accumulated depreciation.

i.e., Book value = 3.5 - 1.1

                          = $ 2.5 million

Thus the correct option is option (A).