The plant assets section of the comparative balance sheets of Anders Company is

Question

The plant assets section of the comparative balance sheets of Anders Company is reported below ANDERS COMPANY Comparative Balance Sheets 2016 2015 Plant assets Equipment Accum. Depr.-Equipment Equipment, net Buildings Accum. Depr-Bui Buildings, net $ 220,000 $ 310,000 (226,000 $ 104,000 $84,000 $ 420,000 440,000 ldings()(309,000) $ 296,000 $ 131,000 116,000 124,000 During 2016, a building with a book value of $78,000 and an original cost of $340,000 was sold at a gain of $61,600 1. How much cash did Anders receive from the sale of the building? Cash received from the sale of building 2. How much depreciation expense was recorded on buildings during 2016? Depreciation expense.... 3. What was the cost of buildings purchased by Anders during 2016? Purchase of building

Explanation / Answer

1) Calculate cash receive from the sale of the building:

Cash received from sale of building = 78000+61600 = 139600

2) depreciation expenses :

Accumlated depreciation on sale of building = (340000-78000)=262000

Other building accumlated depreciation = (309000-262000)=47000

Depreciation expenses for the year = (124000-47000) = 77000

so depreciation expenses recorded on building during 2016 = 77000+262000 = 339000

3) Purchase of building = (440000-340000-420000) = 320000

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