Question

The equipment account had a $36,000 balance at the beginning of the year, and a $30,000 balance at the end of the year. The accumulated depreciation account had a balance of $22,000 at the beginning of the year, and a $17,000 balance at the end of the year. The income statement reported depreciation expense of $4,000 for the year. Equipment costing $10,000 was sold for its book value. Cash received from the sale to be reported in the Investing Activities section is

Answer 1

Answer:

$1000

Explanation:

The cash received from the equipment sale is equals to the initial cost of the equipment which is $10,000 minus total accumulated depreciation on the equipment charged till date.

Total accumulated depreciation on the equipment=Opening balance of accumulated depreciation+depreciation charge for the year-closing balance of accumulated depreciation

Total accumulated depreciation on the equipment=$22,000+$4,000-$17,000

                                                                                   =$9,000

cash proceeds=$10,000-$9,000=$1000