Question
In: Finance
A company sells used equipment with a book value of $100,000 for $250,000 cash. How would...
A
company sells used equipment with a book value of $100,000 for
$250,000 cash. How would this transaction affect the companys
balance sheet?
Solutions
Expert Solution
This transaction will affect the balancesheet in the below mentioned ways -
A company sold it's old equipment recorded as book value of $ 100000
And, the company recieived cash of $ 250000
Balance sheet has two sides one is Assets side and second is Liability side.
This transaction does not affect the liability side because there is no such obligation to pay for the amount in the question mentioned above.
This transaction will affect two major subheads of the Assets side.
One is Current Assets and second is Fixed assets
Current assets increased by $ 250000
Fixed assets decreased by $ 100000
It is easy to calculate profit but the profit of $ 150000 cannot be shown in the balancesheet because it's a part of income statement and already adjusted in the net income which is further shown in the balancesheet as net income on the liability side of the balancesheet and hence the balancesheet will be equal.
jeff jeffy answered 2 hours agoRelated Solutions
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BRAND purchased equipment for $290,000 cash, sold equipment
costing $150,000 with a book value of $100,000, and declared and
paid dividends during 2021. No new notes payable were issued during
the year.
Financial data follows. All balances are
normal.
Balance Sheet
Dec. 31, 2021
Dec. 31, 2020
Change
Cash
$ 36,000
$29,000
$ 7,000
Accounts receivable
125,000
97,000
28,000
Inventory
100,000
114,000
(14,000)
Equipment
740,000
600,000
140,000
Accum. depreciation
370,000
220,000
150,000
Accounts payable
170,000
150,000
20,000
Unearned revenue
74,000
44,000
30,000
Accrued...
BRAND purchased equipment for $290,000 cash, sold equipment costing $150,000 with a book value of $100,000,...
BRAND purchased equipment for $290,000 cash, sold equipment
costing $150,000 with a book value of $100,000, and declared and
paid dividends during 2021. No new notes payable were issued during
the year.
Financial data follows. All balances are
normal.
Balance Sheet
Dec. 31, 2021
Dec. 31, 2020
Change
Cash
$ 36,000
$29,000
$ 7,000
Accounts receivable
125,000
97,000
28,000
Inventory
100,000
114,000
(14,000)
Equipment
740,000
600,000
140,000
Accum. depreciation
370,000
220,000
150,000
Accounts payable
170,000
150,000
20,000
Unearned revenue
74,000
44,000
30,000
Accrued...
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Alamos Co, exchanged equipment and $18,000 cash for similar
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were $82,000 and $90,000 respectively. Assuming that the exchange
has commercial substance, Alamos would record a gain (loss) of:
Prepare the journal entry for the above transaction.
P. Chang & Co. exchanged land and $9,400 cash for equipment. The book value and the...
P. Chang & Co. exchanged land and $9,400 cash for equipment.
The book value and the fair value of the land were $107,800 and
$88,400, respectively.
Assuming that the exchange has commercial substance, Chang
would record equipment and a gain/(loss) on exchange of assets in
the amounts of:
Equipment
Gain/(loss)
a.
$
97,800
$
(19,400
)
b.
$
88,400
$
(28,800
)
c.
$
107,800
$
19,400
d.
$
107,800
$
(9,400
)
Multiple Choice
Option D
Option A
Option...
Stanton exchanged its old equipment for a new equipment: Book Value Fair Value Cash Paid Case I &nbs
Stanton exchanged its old equipment for a new
equipment:
Book
Value Fair
Value Cash Paid
Case
I $300,000 $340,000 $60,000
Case II
$200,000 $180,000 $28,000
Stanton records the following items in Case I (with and without
C.S.)?
Record
the new equipment
at: Record
a gain of (loss) of:
Stanton records the following items in Case II (with and without
C.S.)?
Record
the new equipment
at: Record
a gain of (loss) of:
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$2,000,000. The two pieces of equipment have similar functions and
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(b Stevenson Company purchased equipment for $250,000 on January 1, 2010. The estimated salvage value is...
(b Stevenson Company purchased equipment for $250,000 on January
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$100,000. The journal entry to record the sale of the equipment
will include. (5 points)
A.
A debit to cash of $100,000, a credit to equipment of
$250,000
B.
A credit to accumulated depreciation of $140,000
C.
A debit...
Cash Flows from Investing Activities During the year, Hayashi, Inc. sold equipment with a book value...
Cash Flows from
Investing Activities
During the year,
Hayashi, Inc. sold equipment with a book value of $125,000 for
$175,000 (original purchase cost of $225,000). New equipment was
purchased.
Hayashi provided the
following comparative balance sheets:
Hayashi, Inc.
Comparative Balance Sheets
At December 31, 20X1 and 20X2
20X1
20X2
Long-Term Assets
Plant and equipment
$1,000,000
$1,025,000
Accumulated depreciation
(500,000)
(525,000)
Land
500,000
711,750
Required:
Calculate the
investing cash flows for the current year. Use a minus sign to
indicate a...
Roho Company acquired equipment on July 1, 2019, for $100,000. The residual value is $20,000 and...
Roho Company acquired equipment on July 1, 2019, for $100,000.
The residual value is $20,000 and the estimated life is 5 years
or 40,000 hours. Compute the depreciation expense for the years
ending December 31, 2019 and December 31, 2020 if Roho Company
uses the double−declining−balance method of depreciation.
A. $9000 for 2019; $ 36400 for 2020
B. $20000 for 2019; $ 32000 for 2020
C. $4500 for 2019; $ 9000 for 2020
D. $40000 for 2019; $ 24000 for...
During the year, Murray Company sold equipment with a book value of $125,000 for $175,000 (original...
During the year,
Murray Company sold equipment with a book value of $125,000 for
$175,000 (original purchase cost of $225,000). New equipment was
purchased.
Murray provided the
following comparative balance sheets:
Murray Company
Comparative Balance Sheets
At December 31, 20X1 and 20X2
20X1
20X2
Long-Term Assets
Plant and equipment
$1,000,000
$1,025,000
Accumulated depreciation
(500,000)
(525,000)
Land
500,000
741,750
Required:
Calculate the
investing cash flows for the current year. Use a minus sign to
indicate a cash outflow.
$
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