Use the following information for questions.
During calendar 2020, Laertes Corp. sold equipment for $ 70,000. The equipment had cost $ 100,000 and had a book value of $ 52,000 at the time of sale. Data from their comparative statements of financial position are: $\begin{array}{lrr}&\operatorname{Dec} 31 / 20&\operatorname{Dec} 31 / 19\
\text { Equipment } & \$ 720,000 & \$ 650,000 \
\text { Accumulated Depreciation } & 210,000 & 190,000
\end{array}$
-Equipment purchased during 2020 was
A) $ 170,000.
B) $ 100,000.
C) $ 70,000.
D) $ 30,000.

Question

Quizplus · Accepted Answer

The equipment purchased during 2020 can be calculated by adjusting the equipment's net book value for purchases and disposals. The beginning book value of equipment was $650,000, and the ending book value was $720,000, indicating an increase of $70,000. However, equipment with a cost of $100,000 was sold, which means the total cost of equipment purchased must have been the difference needed to reach the ending book value plus the cost of the sold equipment. Therefore, the calculation is $70,000 (increase in book value) + $100,000 (cost of sold equipment) = $170,000.

Use the Following Information for Questions -Equipment Purchased During 2020 Was A) $ 170,000

Use the Following Information for Questions -Equipment Purchased During 2020 Was
A) $ 170,000