A building that originally cost $40,000 and which was three forths depreciatied
ID: 2594675 • Letter: A
Question
A building that originally cost $40,000 and which was three forths depreciatied was sold for $7,000.
I dont know how to get a depreciation expense-building, amortization of discount and loss on sale of building by using this information.
t he comparative balance sheets for 2013 and 201 t given below f provided also. rDux Company. Additional information from Dux' l DUX COMPANY Comparative Balance Sheets December 31, 2013 and 2012 (S in 000s) 2012 2013 Assets Cash Accounts receivable Dividends receivable 20 47 33 $ 50 10 40 250 (50) 369 Inventory 15 70 225 (25) 420 $ ALong-term investment Land Buildings and equipment Less: Accumulated depreciation Liabilities Accounts payable Salaries payable Interest payable Income tax payable Notes payable Bonds payable 13 $ 20 4 30 95 70 Less: Discount on bonds Shareholders' Equity Common stock Paid-in capital--excess of par Retained eamings Less: Treasury stock 210 24 45 200 20 47 420 $ 369Explanation / Answer
Accumulated depreciation on the building sold= 40,000 x 3/4 = $ 30,000 or 30.
Book Value of the Buildings at the time of sale = 40,000 - 30,000 = $ 10,000 or 10
Gain (Loss) on sale of buildings = Sale Proceeds - Book Value = $ 7,000 - $ 10,000 = $ (3,000) or ( 3 )
Hence 30 is reduced from beginning accumalated depreciation of 50, so we have 20. Depreciation expense for the year is 5, hence ending balance in accumulated depreciation = 25.
Accumulated Depreciation : Buildings and Equipment
Discount on Bonds Payable :
Asset Disposal 30 Beginning balance 50 Ending Balance 25 Depreciation Expense 5 55 55Related Questions
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