Ch 12- Homework 3 Required information Use the following information for the Qui
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Ch 12- Homework 3 Required information Use the following information for the Quick Study below The following information applies to the questions displayed below The plant assets section of the comparative balance sheets of Anders Company is reported below 136 ANDERS Comparative Balance Sheets Plant assets $ 285,0ee 295,8ee (110,000) $ 95,989 75,88 Accu". Depr .-Equipment Equipment, net Buildings Accus. Depr.-Buildings Buildings, net (220,000) (115,000) -(yeam) References s 290,8ee 125,000 QS 12-5 Indirect: Computing investing cash flows LO P2 During 2012, equipment with a book value of $45,000 and an original cost of $235.000 was sold at a loss of $4,000 1 How much cash did Anders receive from the sale of eqipment 2. How much depreciation expense was recorded on equpment during 2017Explanation / Answer
1. Book value of equipment sold = 45,000
Loss on sale = 4,000
Cash received from sale of equipment = Book value of equipment sold - Loss on sale = 45,000 - 4,000 = 41,000.
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2. Cost of equiment sold = 235,000
Book value of equipment sold = 45,000
Accumulated depreciation on equipment sold = Cost of equiment sold - Book value of equipment sold = 235,000 - 45,000 = 190,000
Accumulated depreciation on equipment in 2016 = 220,000
Accumulated depreciation on unsold equipment = Accumulated depreciation on equipment in 2016 - Accumulated depreciation on equipment sold = 220,000 - 190,000 = 30,000
Accumulated depreciation in 2017 = 110,000
Depreciation recorded in 2017 = Accumulated depreciation in 2017 - Accumulated depreciation on unsold equipment = 110,000 - 30,000 = 80,000
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3. Cost of equipment in 2016 = 295,000
Cost of equipment sold in 2017 = 235,000
Cost of unsold equipment = Cost of equipment 2016 - Cost of equipment sold in 2017 = 295,000 - 235,000 = 60,000
Equipment balance in 2017 = 205,000
Equipment purchased during 2017 = Equipment balance in 2017 - Cost of unsold equipment = 205,000 - 60,000 = 145,000.
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