Question
In: Accounting
The following selected data were taken from the financial statements of Aggie Company. Dec 31, 2018...
- The following selected data were taken from the financial
statements of Aggie Company.
|
Dec 31, 2018 |
Dec 31, 2019 |
|
|
Accounts receivable |
$380,000 |
$360,000 |
|
Rent receivable |
3,200 |
3,360 |
|
Inventories |
180,000 |
176,000 |
|
Supplies |
1,360 |
2,000 |
|
Property, plant, & equipment |
400,000 |
480,000 |
|
Accumulated depreciation |
80,000 |
84,000 |
|
Accounts payable |
216,000 |
212,000 |
|
Other accrued liabilities |
40,800 |
43,200 |
|
Retained earnings |
72,000 |
100,160 |
In addition, you have learned that property, plant, and equipment with a historical cost of $16,000 was sold during the year for cash. Accumulated depreciation related to the assets sold was $4,000.
Aggie Company’s income statement for 2019 is below
|
Revenues |
|
|
Sales |
$400,000 |
|
Rental Income |
6,560 |
|
Gains on sales of P, P, &E |
1,600 |
|
Total revenues |
408,160 |
|
Expenses |
|
|
COGS |
278,800 |
|
Supplies used |
3,760 |
|
Other accrued expenses |
61,600 |
|
Depreciation expense |
8,000 |
|
Total expenses |
352,160 |
|
Net Income |
56,000 |
- For how much was the property, plant, and equipment sold during
the year?
- How much property, plant, and equipment was purchased during the year?
Solutions
Expert Solution
Answer to Part
a.
Cost of Property, Plant and Equipment sold = $16,000
Accumulated Depreciation on Property, Plant and Equipment sold =
$4,000
Net Value of Property, Plant and Equipment = Cost – Accumulated Depreciation
Net Value of Property, Plant and Equipment sold = $16,000 -
$4,000
Net Value of Property, Plant and Equipment sold = $12,000
Gain on Sale of Property, Plant and Equipment = Sale Proceeds –
Net Value
$1,600 = Sale Proceeds - $12,000
Sale Proceeds = $13,600
Therefore, the Property, Plant and Equipment was sold for $13,600 during the year.
Answer to Part
b.
Gross Property, Plant and Equipment, December 31, 2019 = Gross
Property, Plant and Equipment, December 31, 2018 + Cost of
Equipment purchased – Cost of Equipment sold
$480,000 = $400,000 + Cost of Equipment purchased - $16,000
Cost of Equipment purchased = $96,000
Therefore, the Property, Plant and Equipment was purchased for $96,000 during the year.
ekkarill92 answered 2 years agoRelated Solutions
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