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.-Buildings Buildings, net $ 300,000 $ 390,000 (148,000)_(258,000) $ 152,000 $ 132,000 $ 500,000 520,000 (172,000)__(357,000) $ 328,000 $163,000 During 2016, a building with a book value of $94,000 and an original cost of $420,000 was sold at a gain of $64,800. 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.Cash received from sale of Building= $94000+$64800 = $158800

2.Depreciation Expense = $172000-(357000-326000) = 141000

#420000-94000=326000(accumlated depreciation on asset sold)

3.Cost of Building purchased = 400000

#a)Balance sheet Value of buildings as on 2016 = 500000

b)Balance sheet Value of buildings as on 2015 = 520000

c)Book value of assets sold in 2016 = 420000

d) Value of buildings brought forward from 2015 = 520000-420000=100000

e) Value of buildings purchased = 500000-100000=400000

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