Question

Jamison Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Jamison Company from its comparative balance sheet. Compute the cash received from the sale of the equipment. At December 31Year 2Year 1Equipment$610,000 $750,000 Accumulated Depreciation-Equipment 428,000 500,000 Multiple Choice$38,000.$23,000.$35,000.$67,000.$40,000.

Answer 1

Answer:

$38,000

Explanation:

sales price - (equipment - acc depreciation) = gain on disposal

X              -   (140,0000 - acc depreciation) = 5,000

this are the changes the acc depreciation account had during the period:

beginning - acc depreciation on equipment sold + depreciation expense for the period = ending

we post our know values and solve for acc depreciation on equipment

500,000 - acc dep + 35,000 = 428,000

acc dep = 500,000 +35,000 - 428,000

acc dep = 107,000

now return to our previous formula

and post the acc depreciation

sales price - (equipment - acc depreciation) = gain on disposal

X  - (140,000-107,000) = 5,000

X - 33,000 = 5,000

X = 33,000+5,000 = 38,000