On January 1, 2019, Blossom Corporation acquired a small mine for $20 million along with equipment costing $8 million. Management estimated at that time that the mine should produce 25,000 ounces of gold and have no residual value while the equipment would have a useful life of eight years and no residual value. In 2019 and 2020, the company produced 1,000 and 1,400 ounces of gold, respectively. The company uses the straight-line method of depreciation for its equipment, and its year end is December 31. On December 31, 2021, the company sold some equipment for a loss of $250,000. After recording the sale, the balances in the Equipment account and Accumulated Depreciation account were $6,800,000 and $1,841,667, respectively. Based on this information, what were the proceeds received when this equipment was sold? Cash proceeds from sale $Type your answer here

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
On January 1, 2019, Blossom Corporation
acquired a small mine for $20 million along
with equipment costing $8 million.
Management estimated at that time that the
mine should produce 25,000 ounces of gold
and have no residual value while the
equipment would have a useful life of eight
years and no residual value. In 2019 and 2020,
the company produced 1,000 and 1,400
ounces of gold, respectively. The company
uses the straight-line method of depreciation
for its equipment, and its year end is December
31.
On December 31, 2021, the company sold
some equipment for a loss of $250,000. After
recording the sale, the balances in the
Equipment account and Accumulated
Depreciation account were $6,800,000 and
$1,841,667, respectively. Based on this
information, what were the proceeds received
when this equipment was sold?
Cash proceeds from
sale
$Type your answer
here
Transcribed Image Text:On January 1, 2019, Blossom Corporation acquired a small mine for $20 million along with equipment costing $8 million. Management estimated at that time that the mine should produce 25,000 ounces of gold and have no residual value while the equipment would have a useful life of eight years and no residual value. In 2019 and 2020, the company produced 1,000 and 1,400 ounces of gold, respectively. The company uses the straight-line method of depreciation for its equipment, and its year end is December 31. On December 31, 2021, the company sold some equipment for a loss of $250,000. After recording the sale, the balances in the Equipment account and Accumulated Depreciation account were $6,800,000 and $1,841,667, respectively. Based on this information, what were the proceeds received when this equipment was sold? Cash proceeds from sale $Type your answer here
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Accounting for Impairment of Assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education