12/31/2017 12/31/2016 Equipment $813,000 (2017) $733,000 (2018) Accumulated Depr
ID: 2525440 • Letter: 1
Question
12/31/2017
12/31/2016
Equipment
$813,000 (2017)
$733,000 (2018)
Accumulated Depreciation
491,000 (2017)
476,000 (2018)
Book Value
$322,000 (2017)
$257,000 (2018)
The following information is taken from Ward Company's records:
Equipment was purchased during 2017 for $150,000 cash.
A gain on sale of equipment of $7,000 was recorded during 2017.
Equipment was sold during 2017 for $52,000.
Compute the amount of depreciation expense for 2017.
Ward Company had the following excerpt from its financial records:12/31/2017
12/31/2016
Equipment
$813,000 (2017)
$733,000 (2018)
Accumulated Depreciation
491,000 (2017)
476,000 (2018)
Book Value
$322,000 (2017)
$257,000 (2018)
The following information is taken from Ward Company's records:
Equipment was purchased during 2017 for $150,000 cash.
A gain on sale of equipment of $7,000 was recorded during 2017.
Equipment was sold during 2017 for $52,000.
Required:Compute the amount of depreciation expense for 2017.
Explanation / Answer
Answer:
Cost of Equipment Sold = Equipment, 2017 + Equipment purchased - Equipment, 2018
Cost of Equipment Sold = $813,000 + $150,000 - $733,000
Cost of Equipment Sold = $230,000
Book Value of Equipment sold = Proceed from Sale - Gain on sale
Book Value of Equipment sold = $52,000 - $7,000
Book Value of Equipment sold = $45,000
Depreciation on Equipment Sold = Cost of Equipment Sold - Book Value of Equipment sold
Depreciation on Equipment Sold = $230,000 - $45,000
Depreciation on Equipment Sold = $185,000
Depreciation Expense = Accumulated Depreciation, 2018 + Depreciation on Equipment Sold - Accumulated Depreciation, 2017
Depreciation Expense = $476,000 + $185,000 - $491,000
Depreciation Expense = $170,000
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