The Belvedere Corporation had a balance in its Equipment account on January 1,2016 of $320,000.During the year,equipment originally costing $85,000 and having Accumulated Depreciation of $20,000 was sold for $67,000.The ending balance of the Equipment Account was $275,000.How much did the company spend to purchase additional equipment during 2016?
A)$40,000
B)$25,000
C)$90,000
D)$92,000

Question

Quizplus · Accepted Answer

The company sold equipment with a book value of $65,000 ($85,000 - $20,000) for $67,000, resulting in a gain of $2,000. The ending balance of the Equipment account was $275,000, which is $55,000 less than the beginning balance of $320,000. This means that the company sold equipment with a book value of $55,000. The company also purchased additional equipment for $92,000 ($275,000 - $320,000 + $55,000 - $2,000).

The Belvedere Corporation Had a Balance in Its Equipment Account