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During 2020, Sunland Company sold equipment that had cost $390000 for $234200. This resulted in a...

During 2020, Sunland Company sold equipment that had cost $390000 for $234200. This resulted in a gain of $16600. The balance in Accumulated Depreciation—Equipment was $1300000 on January 1, 2020, and $1230000 on December 31. No other equipment was disposed of during 2020. Depreciation expense for 2020 was

$217600.
$70000.
$86600.
$102400.
Business   Accounting   
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Answer #1

Answer: The correct answer is $102,400

Book Value of Equipment = Sale Value – Gain on Sale of Equipment
Book Value of Equipment = $234,200 - $16,600
Book Value of Equipment = $217,600

Depreciation on Equipment Sold = Cost of Equipment – Book Value of Equipment
Depreciation on Equipment Sold = $390,000 - $217,600
Depreciation on Equipment Sold = $172,400

Depreciation Expense 2020 = Ending Depreciation – Beginning Depreciation + Depreciation on Equipment Sold
Depreciation Expense 2020 = $1,230,000 - $1,300,000 + $172,400
Depreciation Expense 2020 = $102,400

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