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?

 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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