Question

Jeffreys Company reports depreciation expense of $52,000 for Year 2. Also, equipment costing $176,000 was sold for a $11,200 loss in Year 2. The following selected information is available for Jeffreys Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.

a. $72,800.
b. $40,000.
c. $51,200.
d. $52,000.
e. $28,800.

Answer 1

a. $72,800

Step-by-step explanation:

Note: This is an incomplete question as the concluding parts are gotten from the internet.

Accumulated depreciation - equipment

year 2 $476,000, year 1, $560,000

To get cash received from the sale of the equipment, we will calculate it as

= Change in accumulated depreciation - loss on sale of equipment,

Where;

Change in accumulated depreciation = Year 1 balance - Year 2 balance

= $560,000 - $476,000

= $84,000

Whereas the loss on sale of equipment is $11,200

Therefore;

Cash received = $84,000 - $11,200

= $72,800