The plant assets section of the comparative balance sheets o

The plant assets section of the comparative balance sheets of Anders Company is reported below. Anders Company Comparative Balance Sheets 2015 2014 Plant assets Equipment $ 180,000 $ 270,000 Accum. Depr.—Equipment (100,000 ) (210,000 ) Equipment, net $ 80,000 $ 60,000 Buildings $ 380,000 $ 400,000 Accum. Depr.—Buildings (100,000 ) (285,000 ) Buildings, net $ 280,000 $ 115,000 During 2015, equipment with a book value of $40,000 and an original cost of $210,000 was sold at a loss of $3,000. 1. How much cash did Anders receive from the sale of equipment? 2. How much depreciation expense was recorded on equipment during 2015? 3. What was the cost of new equipment purchased by Anders during 2015? References

Solution

Req a: Cash received from sale of assets: Book value of equipment sold 40000 less: Loss on sale of Equipment 3000 Cash received from sale of assets: 37000 Req b: Depreciation expense during 2015: Beginning balance in Accumulated dep 210000 Less: Accumulated dep on sold equipment 170000 (210000-40000) Remaining balance 40000 Balance at end 100000 Depreciation expense during 2015: 60000 Req c: Cost of New equipment purchased Cost of Equipment in the beginning 270000 Less: Cost of Equipment sold 210000 Balance that have been 60000 Ending balance 180000 Cost of equipment purchased 120000