Question

The plant assets section of the comparative balance sheets of Anders Company is reported below. Anders Company Comparative Balance Sheets 2015 2014 Plant assets Equipment $ 180,000 $ 270,000 Accum. Depr.—Equipment (100,000 ) (210,000 ) Equipment, net $ 80,000 $ 60,000 Buildings $ 380,000 $ 400,000 Accum. Depr.—Buildings (100,000 ) (285,000 ) Buildings, net $ 280,000 $ 115,000 During 2015, equipment with a book value of $40,000 and an original cost of $210,000 was sold at a loss of $3,000. 1. How much cash did Anders receive from the sale of equipment? 2. How much depreciation expense was recorded on equipment during 2015? 3. What was the cost of new equipment purchased by Anders during 2015? References

Answer 1

Req a:
Cash received from sale of assets:
Book value of equipment sold			40000
less: Loss on sale of Equipment			3000
Cash received from sale of assets:			37000
Req b:
Depreciation expense during 2015:
Beginning balance in Accumulated dep				210000
Less: Accumulated dep on sold equipment				170000
	(210000-40000)
Remaining balance				40000
Balance at end				100000
Depreciation expense during 2015:				60000
Req c:
Cost of New equipment purchased
Cost of Equipment in the beginning				270000
Less: Cost of Equipment sold				210000
Balance that have been				60000
Ending balance				180000
Cost of equipment purchased				120000