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goblinko [34]
3 years ago
14

Bonita Industries purchased machinery for $1030000 on January 1, 2017. Straight-line depreciation has been recorded based on a $

82000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2021 at a gain of $27500. How much cash did Bonita receive from the sale of the machinery?
a. $138,000
b. $162,000
c. $198,000
d. $258,000
Business
1 answer:
Stels [109]3 years ago
8 0

Answer:

$235,900

Explanation:

Depreciation p.a. = ($1030000 - $82,000) / 5 years

Depreciation p.a. = $189,600

Depreciation charged till the Jan 1 ,2021 (4 years)

= $189,600 * 4 years

= $758,400

Depreciation charged till May 1, 2021 (4 month)

= $189,600 * 4 months/12 months

= $63,200

Value of the asset = $1030000 - $758,400 - $63,200

Value of the asset = $208,400

Cash received from sale of machinery = $208,400 + $27,500 (gain)

Cash received from sale of machinery = $235,900

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