On January 1, 2019, Blossom Corporation acquired a small mine for $20 million along with equipment costing $8 million. Management estimated at that time that the mine should produce 25,000 ounces of gold and have no residual value while the equipment would have a useful life of eight years and no residual value. In 2019 and 2020, the company produced 1,000 and 1,400 ounces of gold, respectively. The company uses the straight-line method of depreciation for its equipment, and its year end is December 31. On December 31, 2021, the company sold some equipment for a loss of $250,000. After recording the sale, the balances in the Equipment account and Accumulated Depreciation account were $6,800,000 and $1,841,667, respectively. Based on this information, what were the proceeds received when this equipment was sold? Cash proceeds from sale $Type your answer here
On January 1, 2019, Blossom Corporation acquired a small mine for $20 million along with equipment costing $8 million. Management estimated at that time that the mine should produce 25,000 ounces of gold and have no residual value while the equipment would have a useful life of eight years and no residual value. In 2019 and 2020, the company produced 1,000 and 1,400 ounces of gold, respectively. The company uses the straight-line method of depreciation for its equipment, and its year end is December 31. On December 31, 2021, the company sold some equipment for a loss of $250,000. After recording the sale, the balances in the Equipment account and Accumulated Depreciation account were $6,800,000 and $1,841,667, respectively. Based on this information, what were the proceeds received when this equipment was sold? Cash proceeds from sale $Type your answer here
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2019, Blossom Corporation
acquired a small mine for $20 million along
with equipment costing $8 million.
Management estimated at that time that the
mine should produce 25,000 ounces of gold
and have no residual value while the
equipment would have a useful life of eight
years and no residual value. In 2019 and 2020,
the company produced 1,000 and 1,400
ounces of gold, respectively. The company
uses the straight-line method of depreciation
for its equipment, and its year end is December
31.
On December 31, 2021, the company sold
some equipment for a loss of $250,000. After
recording the sale, the balances in the
Equipment account and Accumulated
Depreciation account were $6,800,000 and
$1,841,667, respectively. Based on this
information, what were the proceeds received
when this equipment was sold?
Cash proceeds from
sale
$Type your answer
here
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