Eric Lynd Industries sold equipment with an original cost of $80,000 and accumulated depreciation of $35,000.If the sale of the equipment generated a gain of $10,000 how much cash was received from the sale?

Question

Quizplus · Accepted Answer

To find out how much cash was received, we need to add the gain to the accumulated depreciation to get the book value of the equipment:

Book value = original cost - accumulated depreciation 
Book value = $80,000 - $35,000 
Book value = $45,000

Then, we add the gain to the book value to get the sale price:

Sale price = book value + gain 
Sale price = $45,000 + $10,000 
Sale price = $55,000

Therefore, the answer is C, $55,000.

Eric Lynd Industries Sold Equipment with an Original Cost of $80,000