Question

On January 1, 2020, the Accumulated Depreciation—Machinery account of Klopp, Inc. showed a balance of $703,000....

On January 1, 2020, the Accumulated Depreciation—Machinery account of Klopp, Inc. showed a balance of $703,000. At the end of 2020, after the adjusting entries were posted, it had a balance of $693,000. Depreciation expense for 2020 was $72,000. During 2020, one of the machines was sold for $53,000 cash. This resulted in a gain of $4,000. Assuming that no other assets were disposed of during the year, what is the original cost of the machine sold in 2020?

Homework Answers

Answer #1
Computation of Accumulated dep on machine sold:
Beginning balance of Accumulated dep 7,03,000
Add: Depreciation expense 72,000
Total 7,75,000
Less: Ending balance of Accumulated dep 6,93,000
Accumulated dep on machine sold 82,000
Sale value of machine sold 53000
Less: Gain on sale -4000
Book value of machine 49000
Add: Accumulated dep on machine sold 82000
Original cost of machine sold 131000
Answer is $131,000
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