Boaz Company had the following information: Estimated Overhead $ 300,000 Actual Overhead $ 350,000 Estimated labor hours 75,000
1 answer:
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Answer:
= $31,538
Explanation:
At what amount should the gain from the sale of the building be reported ?
Book value of the building at January 1, 2017 will be calculated by =
Cost of the building - Depreciation
271,010 - 101,000 = $170,010
Windsor sold the building for 261,010 due o January 1,2020, which is exactly three years after the date it was sold.
To find out the gain or loss, we will calculate the present value of the amount paid to Windsor Corporation at January 01, 2017.
Present value =
Note due in 3 years,
PV = = $201,548
The Present value is greater than the book value of the building at January 1,2017, so we have a gain on sale of the building, which is calculated by:
Gain on sale of building = $201,548 - $170,010
= $31,538
Windsor Corporation will report a gain on sale of building of $31,538.