Question

Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.] The plant assets section of the comparative balance sheets of Anders Company is reported below. ANDERS COMPANY Comparative Balance Sheets 2019 2018 Plant assets Equipment $ 245,000 $ 335,000 Accumulated depreciation—Equipment (126,000 ) (236,000 ) Equipment, net $ 119,000 $ 99,000 Buildings $ 445,000 $ 465,000 Accumulated depreciation—Buildings (139,000 ) (324,000 ) Buildings, net $ 306,000 $ 141,000 QS 12-10 Computing investing cash flows LO P3 During 2019, equipment with a book value of $53,000 and an original cost of $275,000 was sold at a loss of $5,600. 1. How much cash did Anders receive from the sale of equipment? 2. How much depreciation expense was recorded on equipment during 2019? 3. What was the cost of new equipment purchased by Anders during 2019? Next Visit question mapQuestion 5 linked to 6 of 7 Total 5 6 of 7 Prev

Answer 1

1. Anders received $113,400 cash from the sale of equipment. 2. The depreciation expense recorded on equipment during 2019 was $110,000. 3. The cost of new equipment purchased by Anders during 2019 was $20,000.

Step-by-step explanation:

1. To determine the cash Anders received from the sale of equipment, we need to consider the loss on the sale. The loss on the sale is given as $5,600, which means the cash received will be the book value of the equipment minus the loss.

Book value of the equipment = $119,000

Cash received = Book value of the equipment - Loss on sale

= $119,000 - $5,600

= $113,400

Therefore, Anders received $113,400 cash from the sale of equipment.

2. The depreciation expense recorded on equipment during 2019 can be found by comparing the accumulated depreciation for 2019 and 2018.

Depreciation expense on equipment = Accumulated depreciation (2019) - Accumulated depreciation (2018)

= $126,000 - $236,000

= $110,000

Therefore, the depreciation expense recorded on equipment during 2019 was $110,000.

3. The cost of new equipment purchased by Anders during 2019 can be calculated by considering the change in the net value of equipment from 2018 to 2019.

Cost of new equipment purchased = Net value of equipment (2019) - Net value of equipment (2018)

= $119,000 - $99,000

= $20,000

Therefore, the cost of new equipment purchased by Anders during 2019 was $20,000.