Blanket Corporation sold equipment for cash of $40,500

Accounting Mar 25, 2021

Blanket Corporation sold equipment for cash of $40,500. Accumulated depreciation on the sale date amounted to $34,000 and a loss of $1,800 was recognized on the sale. What was the original cost of the asset?

A. $72,300

B. $75,900

C. $4,700

D. $76,300

E. $42,300

Expert Solution

Answer:

D .

Step-by-Step explanation

Calculate the original cost of the equipment as follow:

Cost of Equipment = Book Value + Accumulated Depreciation

= (Sales Proceeds + Loss) + Accumulated Depreciation

= ($40,500 + $1,800) + $34,000

= $76,300

Thus, the original cost of the given equipment is $76,300.

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