Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment.
A)$62,000.
B)$38,000.
C)$28,000.
D)$18,000.
E)$58,000.

Question

Sebring Company reports depreciation expense of $40,000 for Year 2.Also,equipment costing $140,000 was sold for a $10,000 loss in Year 2.The following selected information is available for Sebring Company from its comparative balance sheet.Compute the cash received from the sale of the equipment. 
A)$62,000. 
B)$38,000. 
C)$28,000. 
D)$18,000. 
E)$58,000.

Quizplus · Accepted Answer

Accumulated depreciation on equipment sold = $500,000 + $40,000- $428,000 = $112,000
Cash received = $140,000-$112,000 = $28,000 - $10,000 = $18,000

Sebring Company Reports Depreciation Expense of $40,000 for Year 2