At December 31, 20X0, the following existed in the records of Loren Company: Fixed Assets - $8,600,000; Accumulated Depreciation - $3,970,000. During the year ended September 30,20X1, fixed assets with a written down value of $370,000 was sold for $490,000. The plant had originally cost $800,000. Fixed assets purchased during the year cost $1,800,000. It is the company's policy to charge a full year's depreciation in the year of acquisition of an asset and none in the year of sale, using a rate of 10% on the straight line basis. What net amount (book value) should appear in the statement of financial position as of September 30, 20X1 for fixed assets?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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At December 31, 20X0, the following existed in the records of Loren Company: Fixed Assets - $8,600,000; Accumulated Depreciation - $3,970,000.

During the year ended September 30,20X1, fixed assets with a written down value of $370,000 was sold for $490,000. The plant had originally cost $800,000. Fixed assets purchased during the year cost $1,800,000. It is the company's policy to charge a full year's depreciation in the year of acquisition of an asset and none in the year of sale, using a rate of 10% on the straight line basis. What net amount (book value) should appear in the statement of financial position as of September 30, 20X1 for fixed assets?

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