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 | |||||
Get Answers For Free
Most questions answered within 1 hours.