Question

Riley, Inc. began the year with Property and Equipment costing $1,020,000 and accumulated depreciation of $180,000. The only change affecting the long-lived assets account during the year is the $82,500 of depreciation expense that must be recorded for the year. What is the amount of Property and Equipment, net, to be reported on the balance sheet at the end of the year?

Answer 1

Property and Equipment of $757,500 will be reported on balance sheet.

Step-by-step explanation:

Fixed assets are reported on the balance sheet by its net book value. Net Book value is calculated by deducting the accumulated depreciation from the cost of the fixed assets.

Cost of Property and Equipment = $1,020,000

Accumulated depreciation at end of the year adter adjustment = $180,000 + $82,500 = $262,500

Net book value = $1,020,000 - $262,500 = $757,500