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 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:
|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|
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from Introduction to Business: Homework Help ResourceChapter 22 / Lesson 15