Brooks Company had the following excerpt from its financial records: 12 31/2017

Question

Brooks Company had the following excerpt from its financial records: 12 31/2017 $850,000 $813,000 S24,) 12/31/2016 Equipment Accumulated Depreciation Book Value 560,000 $ 253,000 The following information is taken from Brooks Company's records: . Depreciation expense for 2017 and 2016 was $92,000 and $96,000, respectively. 2 A gain on sale of equipment of S9,000 was recorded during 2017 3. Equipment was sold during 2017 for $17,000. Required Compute the amount of cash used to purchase the equipment during 2017 Cash used to purchase the equipment: #0 Clear Undo Help Next >> Explain

Explanation / Answer

Accumulated Depreciation as on 31.12.2016 $560,000 Add: Depreciation for 2017 $92,000 Less: Accumulated Depreciation as on 31.12.2016 $603,000 Accumulated Depreciation for sold out equipment $49,000 Sale Value of equipment $17,000 Less: Profit on sale $9,000 Book value of sold out equipment $8,000 Add: Accumulated Depreciation for sold out equipment $49,000 Actual purchase price of sold out equipment $57,000 Equipment as on 31.12.2016 $813,000 Less: Cost value of sold out equipment $57,000 Balance of equipment before purchase $756,000 Equipment as on 31.12.2017 $850,000 Purchase of ne w equipment in 2017 $94,000

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