The following are excerpts from the balance sheet of a company. Particulars Dec 31, 2013 Dec...

The following are excerpts from the balance sheet of a company.

Particulars

Dec 31, 2013

Dec 31, 2012

Furniture

1,32,000

1,84,500

Accumulated Depreciation

(88,700)

(1,10,700)

The income statement reports depreciation expense for the year as Rs 18,000. Also, furniture costing Rs 52,500 was sold for its book value. Compute the ash received from the sale.

Solutions

Expert Solution

Question says that Furniture is sold at book value.
However only cost of furniture that was sold is given
Since Book Value = Cost – Accumulated Depreciation, we must first calculate Accumulated Depreciation on the furniture sold.

Beginning Accumulated Depreciation balance	$ 110,700.00
Add: Depreciation expense	$ 18,000.00
Less: Ending balance of Accumulated Depreciation	$ 88,700.00
Accumulated Depreciation on Furniture sold	$ 40,000.00

Answer

Cost of Furniture sold	$ 52,500.00
Accumulated Depreciation on Furniture sold	$ (40,000.00)
Book Value = Cash received from sale	$ 12,500.00

Cash received on Sale = $ 12,500

ekkarill92 answered 1 year ago

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