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.

  
During 2016, a building with a book value of $71,000 and an original cost of $305,000 was sold at a gain of $60,200.

1. How much cash did Anders receive from the sale of the building?

2. How much depreciation expense was recorded on buildings during 2016?

3. What was the cost of buildings purchased by Anders during 2016?

ANDERS COMPANY Comparative Balance Sheets 2016 2015 Plant assets Equipment $ 185,000 $ 275,000 Accum. Depr.—Equipment (102,000 ) (212,000 ) Equipment, net $ 83,000 $ 63,000 Buildings $ 385,000 $ 405,000 Accum. Depr.—Buildings (103,000 ) (288,000 ) Buildings, net $ 282,000 $ 117,000

Explanation / Answer

1. How much cash did Anders receive from the sale of the building?

Sale value of building = (71000+60200) = 131200

2. How much depreciation expense was recorded on buildings during 2016?

Depreciation expenses = (288000-103000) = (185000); (305000-71000) = 234000

so depreciation expenses during 2016 = (234000-185000) = 49000

3. What was the cost of buildings purchased by Anders during 2016?

Building purchase = (405000-305000-385000) = 285000

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