Question

In: Accounting

Use the following information for the Quick Study below. The plant assets section of the comparative...

Use the following information for the Quick Study below.

The plant assets section of the comparative balance sheets of Anders Company is reported below.

ANDERS COMPANY
Comparative Balance Sheets
2017 2016
Plant assets
Equipment $ 195,000 $ 285,000
Accum. Depr.—Equipment (106,000 ) (216,000 )
Equipment, net $ 89,000 $ 69,000
Buildings $ 395,000 $ 415,000
Accum. Depr.—Buildings (109,000 ) (294,000 )
Buildings, net $ 286,000 $ 121,000

QS 16-6 Indirect: Computing investing cash flows LO P2

During 2017, a building with a book value of $73,000 and an original cost of $315,000 was sold at a gain of $63,000.

1. How much cash did Anders receive from the sale of the building?
2. How much depreciation expense was recorded on buildings during 2017?
3. What was the cost of buildings purchased by Anders during 2017?

1. Cash received from the sale of building
2. Depreciation expense
3. Purchase of building

Solutions

Expert Solution

Accumulated dep on building sold
original cost 315,000
less:Accumulated depreciation 242,000
Book value at year end 73,000
1) book value at year end 73,000
Add:gain on sale of building 63,000
Cash received on sale of building 136,000
2) Accumulated dep on building sold
original cost 315,000
less:Accumulated depreciation 242,000
Book value at year end 73,000
Accumulated depreciation 2016 294,000
less accumulated dep on building sold -242,000
balance 52,000
Accumulated depreciation for year 2017 109,000
less balance (above) -52,000
Depreciation for the year 2017 57,000
3) cost of building purchased
cost on 2016 415000
less sold -315,000
balance 100000
buildings cost in 2017 395,000
less balance above -100,000
cost of building purchased 295,000
1 cash received from sale of building 136,000
2 Depreciation expense 57,000
3 purchase of building 295,000

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