Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

The following items are taken from the financial statements of the Postal Servic

ID: 2446568 • Letter: T

Question

The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015:
Accounts payable                                                                                                       $ 18,000
Accounts receivable                                                                                                       11,000
Accumulated depreciation – equipment                                                                     28,000
Advertising expense                                                                                                       21,000
Cash                                                                                                                             15,000
Common stock                                                                                                                42,000
Dividends                                                                                                                       14,000
Depreciation expense                                                                                                     12,000
Equipment                                                                                                                    210,000
Insurance expense                                                                                                            3,000
Note payable, due 6/30/16                                                                                        70,000
Prepaid insurance (12-month policy)                                                                          6,000
Rent expense                                                                                                                 17,000
Retained earnings (1/1/15)                                                                                        60,000
Salaries and wages expense                                                                                        32,000
Service revenue                                                                                                             133,000
Supplies                                                                                                                           4,000
Supplies expense 6,000

What is the book value of the equipment at December 31, 2015?

Explanation / Answer

Book Value of the equipment on 31 december 2015 = Original cost - Accumulated Depreciation- Depreciation Expense

= 210000-28000 -12000 i.e 170000