Question

Help Required information Use the following information for the Quick Study below. The plant assets section of the comparative balance sheets of Anders Company is reported below. ed ANDERS COMPANY Comparative Balance Sheets 2017 2016 Plant assets Equipment $ 300,000 $ 390,000 Accum. Depr.-Equipment (148,000). (258.000) Equipment, net $ 152,000. $ 132,000 Buildings $ 500,000 $ 520,000 Accum. Depr.-Buildings (172,000). (357,000) Buildings, net $ 328,000 $ 163,000 QS 16-5 Indirect: Computing investing cash flows LO P2 During 2017, equipment with a book value of $64,000 and an original cost of $225,000 was sold at a loss of $7,800. 1. How much cash did Anders receive from the sale of equipment? Cash received from the sale of equipment 2. How much depreciation expense was recorded on equipment during 2017? < Prey 34 of 14 Next >

Answer 1

Part 1

Cash received from the sale of equipment

$56200

Cash received = book value – loss = 64000-7800 = $56200

Part 2

Depreciation expense

$51000

	2016	2017
Accumulated depreciation	258000	148000
Accumulated depreciation – old (225000-64000)	(161000)
Total Depreciation expense	97000	(97000)
Difference		$51000

Part 3

Purchase of new equipment

$135000

Cost of new equipment  = 300000-(390000-225000) = $135000