Question

Ford Company reports depreciation expense of $49,000 for Year 2. Also, equipment costing $168,000 was sold for its book value in Year 2. There were no other equipment purchases or sales during the year. The following selected information is available for Ford Company from its comparative balance sheet. Compute the cash received from the sale of the equipment. At December 31 Year 2 Year 1 Equipment $ 655,000 $ 823,000 Accumulated Depreciation-Equipment 464,000 545,000

Answer 1

$38,000

Step-by-step explanation:

Computation to determine the cash received from the sale of the equipment

First step is to calculate the Accumulated depreciation on equipment sold

Accumulated depreciation on equipment sold = $545,000 + $49,000 − $464,000

Accumulated depreciation on equipment sold= $130,000

Now let determine the Cash received

Cash received = $168,000 − $130,000

Cash received = $38,000

Therefore cash received from the sale of the equipment is $38,000