Question

Mercury Company reports depreciation expense of $56,000 for Year 2. Also, equipment costing $189,000 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 Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment

Answer 1

Hi, your question information is incomplete

For computing the cash received, first, we have to find the balance of accumulated depreciation but incomplete question information will not allow to do so.

Answer 2

Hi, the information you have provided has missing important information.

However relevant detail to tackle the question is provided as follows:

Prepare the Equipment Disposal T - Account and use it to find the missing balance.

Debit :

Cost $189,000

Profit on Disposal xxxx

Credit:

Accumulated Depreciation $112,000

Loss on Disposal xxxx

Cash (Balancing figure) $ xxxx

The Cash received from the sale of the equipment is provided as a balancing figure for this account.