Answered: At December 31 Current Year Prior Year…

At December 31 Current Year Prior Year Furniture ... Accumulated depreciation-Furniture...... $132,000 $ 184,500 (88,700) (110,700)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 4MCQ

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Question

The following information is from Ellerby Company’s comparative balance sheets. The current-year income
statement reports depreciation expense on furniture of $18,000. During the year, furniture costing
$52,500 was sold for its book value. Compute cash received from the sale of furniture.

At December 31
Current Year
Prior Year
Furniture ...
Accumulated depreciation-Furniture......
$132,000
$ 184,500
(88,700)
(110,700)

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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