Question

A company had the following information in its long-term assets section on the balance sheet: December...

A company had the following information in its long-term assets section on the balance sheet: December 31, 2017 December 31, 2016 Equipment $490,000 $410,000 Accumulated Depreciation (65,000) (35,000) Book Value $425,000 $375,000 During the year, the company sold equipment that had originally cost $25,000 and had accumulated depreciation of $10,000. The company also recognized a gain on the sale of the equipment of $3,000. Based on this information, determine the amount of depreciation expense for the year that would appear in the operating section of the statement of cash flows.

Homework Answers

Answer #1

Depreciation expense for the year = $40,000

Working

Accumulated depreciation, Beginning value $       35,000.00
Less: Depreciation asset sold $       10,000.00
Subtotal $       25,000.00
Less: Accumulated depreciation, Ending value $       65,000.00
Depreciation expense for the year $       40,000.00
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