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

Quizplus · Accepted Answer

To calculate the cash received from the sale of equipment, we need to subtract the loss from the book value (cost - accumulated depreciation) of the equipment.
Book value = $140,000 - $40,000 = $100,000
Cash received = $100,000 - $10,000 = $90,000
Therefore, the correct answer is D: $18,000.

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