Question

In: Accounting

The following selected data were taken from the financial statements of Aggie Company. Dec 31, 2018...

  1. 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

  1. For how much was the property, plant, and equipment sold during the year?
  2. 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.


Related Solutions

The following selected data were taken from the financial statements of Vidahill Inc. for December 31,...
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $268,000 $241,000 $214,000 Notes payable (8% interest) 90,000 90,000 90,000 Common stock 36,000 36,000 36,000 Preferred 3% stock, $100 par 18,000 18,000 18,000 (no change during year) Retained earnings 100,665 69,485 54,000 The 20Y7 net income was $31,720, and the 20Y6 net income was $16,025. No dividends on common stock were declared between...
The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5:
Profitability RatiosThe following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5:December 3120Y720Y620Y5Total assets$321,000$289,000$257,000Notes payable (8% interest)110,000110,000110,000Common stock44,00044,00044,000Preferred 7% stock, $100 par22,00022,00022,000(no change during year)Retained earnings113,65083,49066,000The 20Y7 net income was $31,700, and the 20Y6 net income was $19,030. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7.a. Determine the return on total assets, the return on stockholders'...
The following data were taken from the financial statements of Hunter Inc. for December 31 of...
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $510,000 $130,000 Current maturities of serial bonds payable 320,000 320,000 Serial bonds payable, 10% 1,270,000 1,590,000 Common stock, $1 par value 60,000 80,000 Paid-in capital in excess of par 660,000 660,000 Retained earnings 2,280,000 1,810,000 The income before income tax was $588,300 and $514,800 for the current and previous years, respectively. a. Determine the ratio...
The following data were taken from the financial statements of Hunter Inc. for December 31 of...
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $360,000 $110,000 Current maturities of serial bonds payable 240,000 240,000 Serial bonds payable, 10% 1,020,000 1,260,000 Common stock, $1 par value 60,000 70,000 Paid-in capital in excess of par 590,000 600,000 Retained earnings 2,050,000 1,630,000 The income before income tax was $415,800 and $363,800 for the current and previous years, respectively. a. Determine the ratio...
The following data were taken from the financial statements of Hunter Inc. for December 31 of...
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $918,000 $217,000 Current maturities of serial bonds payable 540,000 540,000 Serial bonds payable, 10% 2,150,000 2,690,000 Common stock, $1 par value 90,000 110,000 Paid-in capital in excess of par 990,000 1,000,000 Retained earnings 3,430,000 2,720,000 The income before income tax expense was $941,500 and $823,800 for the current and previous years, respectively. a. Determine the...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y720Y620Y5 Total assets$221,000 $199,000 $177,000 Notes payable (8% interest)70,000 70,000 70,000 Common stock28,000 28,000 28,000 Preferred 5% stock, $100 par14,000 14,000 14,000 (no change during year)       Retained earnings70,600 53,100 42,000 The 20Y7 net income was $18,200, and the 20Y6 net income was $11,800. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $320,000 $288,000 $256,000 Notes payable (8% interest) 110,000 110,000 110,000 Common stock 44,000 44,000 44,000 Preferred 6% stock, $100 par 22,000 22,000 22,000 (no change during year) Retained earnings 117,200 80,880 66,000 The 20Y7 net income was $37,640, and the 20Y6 net income was $16,200. No dividends on common stock were...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $255,000 $230,000 $205,000 Notes payable (8% interest) 90,000 90,000 90,000 Common stock 36,000 36,000 36,000 Preferred 5% stock, $100 par 18,000 18,000 18,000 (no change during year) Retained earnings 94,500 68,025 54,000 The 20Y7 net income was $27,375, and the 20Y6 net income was $14,925. No dividends on common stock were...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for...
Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y720Y620Y5 Total assets$221,000 $199,000 $177,000 Notes payable (8% interest)70,000 70,000 70,000 Common stock28,000 28,000 28,000 Preferred 5% stock, $100 par14,000 14,000 14,000 (no change during year)       Retained earnings70,600 53,100 42,000 The 20Y7 net income was $18,200, and the 20Y6 net income was $11,800. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends...
The following selected data were taken from the financial statements of Squiggle Group Inc. for December...
The following selected data were taken from the financial statements of Squiggle Group Inc. for December 31, 2016, 2015 and 2014: December 31 2016 2015 2014 Total assets $294,000 $265,000 $236,000 Notes payable (10% interest) 100,000 100,000 100,000 Common stock 40,000 40,000 40,000 Preferred 6% stock, $100 par 20,000 20,000 20,000 (no change during year) Retained earnings 93,395 73,850 60,000 The 2016 net income was $20,745, and the 2015 net income was $15,050. No dividends on common stock were declared...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT