On January 1, 2014, the Accumulated Depreciation-Machinery account of a particular company showed a balance of $740,000. At the end of 2014, after the adjusting entries were posted, it showed a balance of $790,000. During 2014, one of the machines which cost $250,000 was sold for $121,000 cash. This resulted in a loss of $8,000. Assuming that no other assets were disposed of during the year, how much was depreciation expense for 2014?

Question

Quizplus · Accepted Answer

The loss on sale of the machine is calculated as: $250,000 (cost) - $121,000 (sale price) - Accumulated Depreciation = $8,000 (loss). Solving for Accumulated Depreciation gives $121,000. The accumulated depreciation increased from $740,000 to $790,000, a net increase of $50,000. Adding the $121,000 depreciation on the sold machine gives a total depreciation expense of $171,000 for 2014.

On January 1, 2014, the Accumulated Depreciation-Machinery Account of a Particular