The Capitals Company Has Provided You the Following Information Pertaining

question 39

Essay

The Capitals Company has provided you the following information pertaining to the year ending December 31,2015:
$\begin{array}{lll}&\text { January 1,2015 } & \text { December } 31,2015\\\text { Equipment } & \$ 575,000 & \$ 729,000 \\\text { Accumulated depreciation } & \$ 165,000 & \$ 120,500\end{array}$
• Equipment costing $25,000 was acquired in exchange for common stock.
• Equipment with an original cost of $57,500 and a book value of $5,000 was scrapped.
• Equipment was purchased in exchange for cash.
• Equipment with a book value of $39,000 was sold resulting in a $14,000 gain.The accumulated depreciation at the time of the sale was $67,000.
Required:
1.Determine the cash paid for equipment purchases during 2015.
2.Determine the depreciation expense for 2015.

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Definitions:

Law of Small Numbers

A cognitive bias that leads people to draw broad conclusions from small samples.

Stereotypes

Oversimplified generalizations about a group of people that often ignore individual differences, sometimes resulting in prejudiced attitudes or discriminatory actions.

Prejudicial

Showing prejudice or bias, leading to unfair treatment or judgments of others based on preconceived opinions rather than individual merit.

Inflexible

Lacking adaptability or willingness to change; often describes individuals, systems, or processes that are rigid and not easily modified.