Question

sale of assests under depreciation. I am having trouble figuring it out. Furniture costing $73,700 is sold at its book value in 2019. Acquisitions of furniture total $60,000 cash, on which no depreciation is necessary because it is acquired at year-end. Complete the general ledger accounts to calculate cash received from the sale of furniture.

Plepalu wapenbeb VU 2/3V Total current assets 232,100 177,600 Furniture 111,000 124,700 Accum. depreciation- (17,200) Furniture (9,400) Total assets $325, 900 $292,900 Liabilities and Equity Accounts payable $ 15,400 $ 21,500 Wages payable 9,200 4,900 Income taxes payable 1,500 2,700 Total current liabilities 26,100 29,100 Notes payable (long- 30,900 71,600 term) Total liabilities 57,000 100,700 Equity Common stock, $5 par 232,600 185,600 value Retained earnings 36,300 6,600 Total liabilities and $325,900 $292,900 equity CRUZ, INC. Income Statement For Year Ended December 31, 2019 Sales $501,300 Cost of goods sold 322,600 Gross profit 178, 700 Operating expenses Depreciation expense $38,600 Other expenses_91,600 130,200 Income before 48,500 taxes Income taxes 17,700 expense Net income $ 30,800 Furniture costing $73,700 sold at its book value in 2019. Acquisitions of furniture total $60,000 cash, on which no depreciation is necessary because it is acquired at year-end. Complete the general ledger accounts to calculate cash received from the sale of furniture. Complete the general ledger accounts to calculate cash received from the sale of furniture. Answer is not complete. Furniture Beg. bal. 124,700 Purchase of assets 60,000 Sale of assets 73,700 End. bal. 111,000 Accumulated Depreciation Beg. bal. 2019 depreciation Sale of assets 9,400 38,600 30,800X End. bal 78,800 Cost Accumulated depreciation Book value (Cash received) 73,700 30,800 42,900 $

Answer 1

When the Fixed Assets are Sold, the Accumulated Depreciation relating to that sold asset shall be debited. All calculations you did are correct. But only wrong is you credited the accumulated depreciation of sold asset of $30800 instead of Debiting. Now the Complete table is as follows Beg.bal. Purchase of Assets Sale of Assets Furniture $ $ 124,700.00 60,000.00 $ 73,700.00 End.bal. $ 111,000.00 Accumulated Depreciation Beg.bal. $ $ 2019 depreciation Sale of Assets 9,400.00 38,600.00 $ 30,800.00 End.bal. $ 17,200.00 Cost Accumulated Depreciation Book Value (Cash received) $ $ $ 73,700.00 30,800.00 42,900.00