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? _____________

Homework Answers

Answer #1
  • 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

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