Question

Assuming No Revaluation: ABC Company owns only one building that it purchased in 2008 at a...

Assuming No Revaluation: ABC Company owns only one building that it purchased in 2008 at a cost of 4,000,000 with an estimated life of 20 years. As of December 31, 2012 the carrying value of the building is $3,000,000. The balance in the Building account is the $4,000,000 historical cost and the accumulated depreciation balance is $1,000,000. On December 31, 2012 after 5 years of depreciation, the company sold the building for $3,700,000.    

What is the amount of gain or loss on the sale?

Show the journal entry to record the sale.

Business   Accounting   
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Homework Answers

Answer #1

book value of building

4000000

less accumulated depreciation

1000000

carrying value of building

3000000

selling price of building

3700000

carrying value of building

3000000

gain on sale of building

700000

journal entry

date

explanation

debit

credit

31-Dec

cash

3700000

accumulated depreciation-building

1000000

building

4000000

gain on sale of building

700000
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