Question

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. ANDERS COMPANY Comparative Balance Sheets 2017 2016 Plant assets Equipment Accum. Depr.-Equipment $ 300,000 (148,000) $ 390,000 (258,000) $ 132,000 Equipment, net Buildings Accum. Depr.-Buildings $ 152,000 $ 500,000 (172,000)- $ 328,000 $ 520,000 (357,000) $ 163,000 Buildings, net QS 16-6 Indirect: Computing investing cash flows LO P2 During 2017, a building with a book value of $94,000 and an original cost of $420,000 was sold at a gain of $84,000. 1. How much cash did Anders receilve from the sale of the building? 2. How much depreciation expense was recorded on buildings during 2017? 3. What was the cost of buildings purchased by Anders during 2017? Cash received from the sale of building 1. 2. Depreciation expense 3. Purchase of building < Prev of 14 Next > 4.

Answer 1

(1) -- How much cash did Anders receive from the sale of the building?

Answer -

Calculation of Cash received from the sale of building

	Particulars	Explanation	Amount ($)
A.	Book value of building	Given in question	94000
B.	Gain on sale	Given in question	84000
Cash received from the sale of building		A + B	178000

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(2) -- How much depreciation expense was recorded on buildings during 2017?

Answer -

	Particulars	Explanation	Amount ($)
A.	Opening accumulated depreciation balance (2016)	Given in question	357000
B.	Depreciation on Building sold	Original cost - Book value = $420000 - $94000	326000
C.	Closing accumulated depreciation balance (2017)	Given in question	172000
. Depreciation expense on Buildings during 2017		C - (A - B) = $172000 - ($357000 - $326000)	. 141000

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(3) -- What was the cost of buildings purchased by Anders during 2017?

Answer -

	Particulars	Explanation	Amount ($)
A.	Gross opening balance of Buildings account (2016)	Given in question	520000
B.	Original cost of Building sold during year	Given in question	420000
C.	Gross closing balance of Buildings account (2017)	Given in question	500000
. Purchase of Building during 2017		C - (A - B) = $500000 - ($520000 - $420000)	. 400000