Jamison Company reports depreciation expense of $55,000 for Year 2. Also, equipment costing $185,000 was sold...

Jamison Company reports depreciation expense of $55,000 for Year 2. Also, equipment costing $185,000 was sold for a $6,500 gain in Year 2. The following selected information is available for Jamison Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

At December 31	Year 2		Year 1
Equipment	$	685,000	$	870,000
Accumulated Depreciation-Equipment		488,000		575,000

Multiple Choice

$43,000.

$49,500.

$98,000.

$55,000.

$36,500.

Solutions

Expert Solution

$49,500.

Working:

a.
	Accumulated depreciation at December 31 of Year 2	$ 4,88,000
	Less:Depreciation expense for Year 2	$ 55,000

	Accumulated depreciation of Year 1 after sale	$ 4,33,000

b.	Accumulated depreciation before sale for Year 1	$ 5,75,000

	Accumulated depreciation for Year 1 after sale	$ 4,33,000

	Accumulated depreciation of sold equipment	$ 1,42,000

c.	Cost of sold equipment	$ 1,85,000
	Accumulated depreciation of sold equipment	$ 1,42,000

	Book Value of sold equipment	$ 43,000

d.	Book Value of sold equipment	$ 43,000
	Gain on sale of equiment	$ 6,500

	Cash received from sale of equipment	$ 49,500

ekkarill92 answered 1 year ago

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