Question

# Here are current-year data regarding Sparrow Company’s delivery trucks: January 1 December 31 Delivery trucks \$180,000...

Here are current-year data regarding Sparrow Company’s delivery trucks:

January 1 December 31

Delivery trucks \$180,000 \$163,000

Accumulated depreciation (33,000) (31,000)

Net book value \$147,000 \$132,000

During the current year, Sparrow acquired a new truck at a cost of \$37,000, reported \$18,000 of depreciation expense related to all its trucks, and reported a \$19,000 gain on the sale of an old truck. How much cash did Sparrow receive from the sale of the old truck? _____________

• Correct Answer = \$ 53,000
 A Accumulated Depreciation - Beginning \$33,000 B Depreciation Expense \$18,000 C Accumulated Depreciation - Ending \$31,000 D = A+B-C Depreciation amount for Truck sold \$20,000 E Truck - Beginning \$180,000 F Truck purchased \$37,000 G Truck - Ending \$163,000 H = E+F-G Truck sold - Cost \$54,000 I = H - D Book Value of truck sold \$34,000 J Gain on sale of truck \$19,000 K = I + J Cash received from sale of old truck \$53,000 Answer

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