The following items are taken from the financial statements of the Postal Servic
ID: 2446568 • Letter: T
Question
The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015:
Accounts payable $ 18,000
Accounts receivable 11,000
Accumulated depreciation – equipment 28,000
Advertising expense 21,000
Cash 15,000
Common stock 42,000
Dividends 14,000
Depreciation expense 12,000
Equipment 210,000
Insurance expense 3,000
Note payable, due 6/30/16 70,000
Prepaid insurance (12-month policy) 6,000
Rent expense 17,000
Retained earnings (1/1/15) 60,000
Salaries and wages expense 32,000
Service revenue 133,000
Supplies 4,000
Supplies expense 6,000
What is the book value of the equipment at December 31, 2015?
Explanation / Answer
Book Value of the equipment on 31 december 2015 = Original cost - Accumulated Depreciation- Depreciation Expense
= 210000-28000 -12000 i.e 170000
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