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7 April, 21:02

Shocker Associates sold office equipment for cash of $162,000. The accumulated depreciation at date of sale amounted to $123,000, and a gain of $16,000 was recognized on the sale. The original cost of the asset must have been:

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  1. 7 April, 21:09
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    Original Cost of asset = $269,000

    Explanation:

    Provided information,

    We have been provided that selling value of equipment = $162,000

    Gain recognized on sale = $16,000

    Gain = Selling price - Book Value

    $16,000 = $162,000 - Book Value

    Book Value = $162,000 - $16,000 = $146,000

    Accumulated Depreciation = $123,000

    Book Value = Original Cost - Accumulated Depreciation

    $146,000 = Original cost - $123,000

    $146,000 + $123,000 = Original Cost = $269,000
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