Assume BizChair.com sold a used conveyor belt for $168,000 cash. If accumulated depreciation on...

Question:

Assume BizChair.com sold a used conveyor belt for $168,000 cash. If accumulated depreciation on the sale date was $57,511 and a gain of $5,921 was recognized on the sale, what was the original cost of the asset?

Depreciation

Depreciation is the expense associated with the regular use or wear and tear of assets. Common methods of computing depreciation are straight-line, sum of the years, units-of-production and double declining method.

Answer and Explanation:

Original cost of the asset is computed as follows:

Selling price $168,000
Less: Gain on sale 5,921
Carrying value at date of sale 162,079
Add: Accumulated depreciation 57,511
Original cost of the asset $219,590

Learn more about this topic:

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Accumulated Depreciation: Definition & Formula

from Introduction to Business: Homework Help Resource

Chapter 22 / Lesson 15
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