Required information Use the following information for the Quick Study below. Th

Question

Required information Use the following information for the Quick Study below. The plant assets section of the comparative balance sheets of Anders Company is reported below ANDERS COMPANY Comparative Balance Sheets 2017 2016 Plant assets Equipment Accum. Depr.- Equipment $ 280,000 370,000 (140,000) (250,000) Equipment, net 140,000 120,000 Buildings Accum. Depr.- Buildings Buildings, net $ 320,000 $ 155,000 $ 480,000 500,000 (160,000) (345,000) QS 16-6 Indirect: Computing investing cash flows LO P2 During 2017, a building with a book value of $90,000 and an original cost of $400,000 was sold at a gain of $80,000. 1. How much cash did Anders receive from the sale of the building? 2. How much depreciation expense was recorded on buildings during 2017? 3. What was the cost of buildings purchased by Anders during 2017? Answer is complete but not entirely Cash received from the sale of buildin 1 2. Depreciation expense 3. Purchase of building 170,00 105,00 380,00

Explanation / Answer

Answer to Part 1: Particulars $ Book value of Building 90000 Add: Gain on sale of building 80000 Cash received from sale of building (90000+80000) 170000 Answer to Part 2: Dr Accumulated Depreciation Account Cr Depreciation of Building sold (400000-90000) 310000 Balance as on 2016 345000 Balance as on 2017 160000 Depreciaiton of Current year (470000-345000) 125000 Total 470000 Total 470000 2. How much depreciation expense was recorded on buildings during 2017 = $ 125000 Answer to part 3: Dr Buildings Account Cr $ $ Balance as on 2016 500000 Building Sold 400000 Purchases (400000+480000-500000) 380000 Balance as on 2017 480000 Total 880000 Total 880000 3. What was the cost of buildings purchased by Anders during 2017 = $ 380000

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