Question

furniture costing $70,400 is sold at its book value in 2021. acquisitions of furniture total $59,600 cash, on which no depreciation is necessary because it is acquired at year-end. complete the general ledger accounts to calculate cash received from the sale of furniture.

Answer 1

The furniture, initially acquired for $59,600, was sold at its book value of $70,400 in 2021. The cash received from the sale is $70,400, resulting in a balanced transaction.

To calculate cash received from the sale of furniture, let's first analyze the transactions and update the general ledger accounts.

Assuming the sale of furniture at book value means there is no gain or loss on the sale, we can represent the transactions as follows:

1. Initial Entry for Furniture Acquisition:

- Debit Furniture (Asset) for $59,600

- Credit Cash for $59,600

2. Sale of Furniture at Book Value in 2021:

- Debit Cash for $70,400

- Credit Furniture (Asset) for $70,400

Now, let's update the general ledger accounts:

Furniture Account:

- Beginning balance: $59,600 (debit)

- Ending balance: $0 (debit) after the sale

Cash Account:

- Beginning balance: $0

- Additional cash received from the sale: $70,400 (credit)

- Ending balance: $70,400 (credit)

Therefore, the cash received from the sale of furniture is $70,400.