The following selected information is from Ellerby Company’s comparative balance

Question

The following selected information is from Ellerby Company’s comparative balance sheets.

The income statement reports depreciation expense for the year of $26,000. Also, furniture costing $60,500 was sold for its book value on December 31, 2017.

Complete the general ledger accounts to calculate the cash received from the sale of furniture.

At December 31 2017 2016 Furniture $ 156,000 $ 216,500 Accumulated depreciation—Furniture (96,700 ) (118,700 ) QS 16-7 Computing cash from asset sales LO P3 The following selected information is from Ellerby Company's comparative balance sheets. At December 31 Furniture Accumulated depreciation-Furniture 2017 2016 156,000$216,500 (96,700) (118,700) The income statement reports depreciation expense for the year of $26,000. Also, furniture costing $60,500 was sold for its book value on December 31, 2017 Complete the general ledger accounts to calculate the cash received from the sale of furniture. Furniture Beg. bal End. bal. Accumulated Depreciation Beg. bal End. bal. Cost Accumulated depreciation Book value (Cash received)

Explanation / Answer

Furniture Beg. Balance $ 216,500 $    60,500 Sales $ 156,000 Ending balance Furniture Dep. On sold assets ($118,700+26,000-96,700) $ 48,000 $ 118,700 Beg. Balance $    26,000 Depreciation expenses End. Balance $ 96,700 Cost $   60,500 Accumulated depreciation $ (48,000) Book value (Cash received) $   12,500

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