please help ty Amanda Con peny purchased ? co mau carroctly coscribes tho comput

Question

please help ty

Amanda Con peny purchased ? co mau carroctly coscribes tho computer sala? er that cost $10 700 t had an estimated use fe a aur years and ? resi I vale a S 35 The computer was dap oc ned by the strelc htlne er ad and was sold et the end a the third year o use or SG GO cash wh ch O the follow ng statements O Assets and stockholder:' equity both decresse by $1.473. Azces and snockhaldara' oquity both Incrcese by $1473 Aons dacnansa S5 160 and stockhaldars equy ls nat affecrad O Assers and stockholders' equity borh increase ay 55,60

Explanation / Answer

Depreciation under straight line method

= (Purchase costs – Salvage value) / Useful life

= ($10,700 - $1,350) / 4

= $ 2,337.5 each year

So, accumulated depreciation for 3 years

= Yearly depreciation x Number of years

= $ 2,337.5 x 3

= $ 7,012.5

So, Book value at the end of 3rd year

= Purchase price – Accumulated depreciation

= $10,700 – $7,012.5

= $ 3,687.5

So, Net profit from sale

= Sales price – Book value

= $5,160 – $3,687.5

= $ 1,473

So, there will be an increase of $1,473 in Assets as cash will increase by $ 1,473 over and above the book value of assets and a corresponding increase in stockholder’s equity as profit has increased by $ 1,473

So, as per above discussion, option B is the correct option

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.