Question

Required Informatlon Use the following information for the Quick Study below The following Information applies to the questions displayed 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 180,00o 270,000 s 80,000 60,000 S 380,000 400, 000 s 280,000 115,000 Equipment Accum. Depr.-Equipment Buildings Accum. Depr.-Buildings Buildings,net QS 12-5 Indirect: Computing investing cash flows LO P2 During 2017, equipment with a book value of $40,000 and an original cost of $210,000 was sold at a loss of $3,000. 1. How much cash did Anders recelve from the sale of equipment? Cesh received from the sale of equipment 2. How much depreclation expense was recorded on equipment during 2017? Depreciation expense

Answer 1

Question (1)

Book Value of Equipment = $40,000.00

Loss on Sale of Equipment = $3,000.00

Hence,

Cash received from sale of Equipment = 40000 - 3000 = $37,000.00

Question (2)

Accumulated Depreciation as on 2016 = $210,000.00

Less: Depreciation to be written off of the asset sold = Cost of asset - Book Value = 210000 - 40000 = $170,000.00

Accumulated Depreciation after sales = $40,000.00

Actual Accumulated Depreciation on 2017 = $100,000.00

Depreciation expenses was recorded on equipment during 2017 = 100000 - 40000 = $60,000.00