Question

The Capitals Company has provided you the following information pertaining to the year ending December 31, 2018:

	January 1, 2018				December 31, 2018
Equipment	$	575,000			$	729,000
Accumulated depreciation	$	165,000			$	120,500

Equipment costing $25,000 was acquired in exchange for common stock.

Equipment with an original cost of $57,500 and a book value of $5,000 was scrapped.

Equipment was purchased in exchange for cash.

Equipment with a book value of $39,000 was sold resulting in a $14,000 gain. The accumulated depreciation at the time of the sale was $67,000.

Required (Please answer the following questions):

-Determine the cash paid for equipment purchases during 2018.

-Determine the depreciation expense for 2018.

Answer 1