During 2021, 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? 2. How much depreciation expense was recorded on equipment during 2021? 3. What was the cost of new equipment purchased by Anders during 2021?
During 2021, 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? 2. How much depreciation expense was recorded on equipment during 2021? 3. What was the cost of new equipment purchased by Anders during 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
During 2021, 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?
2. How much
3. What was the cost of new equipment purchased by Anders during 2021?
![Required information
[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 Year-End Balance Sheets
2021
Plant assets
Equipment
Accumulated depreciation-Equipment
Equipment, net
Buildings
Accumulated depreciation-Buildings
Buildings, net
1. Cash received from the sale of equipment
2. Depreciation expense
3. Purchase of equipment
$ 300,000
(148,000)
$ 152,000
$ 500,000
(172,000)
$ 328,000
2020
$ 390,000
(258,000)
$ 132,000
$ 520,000
(357,000)
$ 163,000
During 2021, 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?
2. How much depreciation expense was recorded on equipment during 2021?
3. What was the cost of new equipment purchased by Anders during 2021?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52d1528b-ffae-4e2b-9096-0f195d47e183%2F2bb886a9-9b7f-4005-a4f9-2fa5e9983781%2Fr28vjgj_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[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 Year-End Balance Sheets
2021
Plant assets
Equipment
Accumulated depreciation-Equipment
Equipment, net
Buildings
Accumulated depreciation-Buildings
Buildings, net
1. Cash received from the sale of equipment
2. Depreciation expense
3. Purchase of equipment
$ 300,000
(148,000)
$ 152,000
$ 500,000
(172,000)
$ 328,000
2020
$ 390,000
(258,000)
$ 132,000
$ 520,000
(357,000)
$ 163,000
During 2021, 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?
2. How much depreciation expense was recorded on equipment during 2021?
3. What was the cost of new equipment purchased by Anders during 2021?
Expert Solution
Step 1
DEPRECIATION EXPENSE
Depreciation means gradual decrease in the value of an asset due to normal wear and tear, obsolescence etc.
Method of Depreciation :—
- Straight Line Method
- Diminishing Value Method
- Sum of Digit Method
- Double Declining Method.
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