Use the following information for the Quick Study below. The plant assets sectio

Question

Use the following information for the Quick Study below.

The plant assets section of the comparative balance sheets of Anders Company is reported below.

QS 16-6 Indirect: Computing investing cash flows LO P2

During 2017, a building with a book value of $73,000 and an original cost of $315,000 was sold at a gain of $63,000.

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?

ANDERS COMPANY Comparative Balance Sheets 2017 2016 Plant assets Equipment $ 195,000 $ 285,000 Accum. Depr.—Equipment (106,000 ) (216,000 ) Equipment, net $ 89,000 $ 69,000 Buildings $ 395,000 $ 415,000 Accum. Depr.—Buildings (109,000 ) (294,000 ) Buildings, net $ 286,000 $ 121,000

Explanation / Answer

Accumulated dep on building sold original cost 315,000 less:Accumulated depreciation 242,000 Book value at year end 73,000 1) book value at year end 73,000 Add:gain on sale of building 63,000 Cash received on sale of building 136,000 2) Accumulated dep on building sold original cost 315,000 less:Accumulated depreciation 242,000 Book value at year end 73,000 Accumulated depreciation 2016 294,000 less accumulated dep on building sold -242,000 balance 52,000 Accumulated depreciation for year 2017 109,000 less balance (above) -52,000 Depreciation for the year 2017 57,000 3) cost of building purchased cost on 2016 415000 less sold -315,000 balance 100000 buildings cost in 2017 395,000 less balance above -100,000 cost of building purchased 295,000 1 cash received from sale of building 136,000 2 Depreciation expense 57,000 3 purchase of building 295,000

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