The Capitals Company has provided you the following information pertaining to the year ending December 31, 2018: January 1, 2018 December 31, 2018Equipment$575,000 $729,000 Accumulated depreciation$165,000 $120,500 Equipment costing $25,000 was acquired in exchange for common stock.
Equipment with an original cost of $57,500 and a book value of $5,000 was scrapped.
Equipment was purchased in exchange for cash.
Equipment with a book value of $39,000 was sold resulting in a $14,000 gain. The accumulated depreciation at the time of the sale was $67,000.
Required:
Determine the cash paid for equipment purchases during 2018.Determine the depreciation expense for 2018.
What will be an ideal response?
$154,000 (the increase in the equipment account) = $25,000 ? $57,500 ? $106,000 (39,000 + 67000) + X (cash equipment purchases); X = $292,500
$44,500 (the decrease in accumulated depreciation) = ?$52,500 ? $67,000 + X (2018 depreciation expense); X = $75,000
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