Use the following information for questions.
Financial statements for Kiner Company are given below:

Total assets on the statement of financial position at December 31, 2011 are $2,216,000.Accumulated deprecia-tion on the equipment sold was $112,000.
-When the equipment was sold, the Buildings and Equipment account received a credit of

Question

Use the following information for questions.
Financial statements for Kiner Company are given below:
  
Total assets on the statement of financial position at December 31, 2011 are $2,216,000.Accumulated deprecia-tion on the equipment sold was $112,000.
-When the equipment was sold, the Buildings and Equipment account received a credit of

Quizplus · Accepted Answer

We know that the total assets on the statement of financial position at December 31, 2011 are $2,216,000. Since the equipment was sold and the accumulated depreciation on the equipment sold was $112,000, we can assume that the equipment had a book value of $208,000 ($320,000 - $112,000).

When the equipment was sold, the Buildings and Equipment account received a credit entry equal to the book value of the equipment. Therefore, the credit entry was $208,000.

Choice C ($160,000) is incorrect because it does not reflect the book value of the equipment sold. Choices A, B, and D are also incorrect for the same reason.

Use the Following Information for Questions