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how12
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Joined: 24 Apr 2012
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Posts: 2

Posted: 24 Apr 2012 at 21:13 \| IP Logged

Beginning and ending plant assets are, respectively, $325,000 and
$370,000. Beginning and ending accumulated depreciation is, respectively,
$82,800 and $95,000. Depreciation expense for the period was $30,000,
and new assets of $76,000 were purchased. Plant assets were sold at a
$10,500 loss. What were the cash proceeds from the sale?  

How do tack this one?

astone
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Joined: 23 Mar 2011
Location: United States
Online Status: Offline
Posts: 91

Posted: 24 Apr 2012 at 23:55 \| IP Logged

Given:		Fixed Assets	Accum Dep
	BB	325,000	(82,800)
		76,000	(30,000)

	EB	370,000	(95,000)

Step 1:	Solve for plant assets sold
	Fixed asset activity = 401,000 (325,000+76,000)
	Fixed asset ending balance = 370,000
	Therefore the asset sold = 31,000 (401,000-370,000)

Step 2:	Solve for accumulated depreciation
	Accum Dep activity =(112,800) (82,800+30,000)
	Accum Dep ending balance = (95,000)
	Therefore the Accum Dep on the asset sold = 17,800 (112,800-95,000)

Step 3:	Solve for Cash Proceeds
	Carrying Value of the asset = 13,200 (31,000-17,800)
	Cash Proceeds = 2,700 (13,200 -10,500)

how12
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Joined: 24 Apr 2012
Online Status: Offline
Posts: 2

Posted: 25 Apr 2012 at 09:50 \| IP Logged

Astone;

Thank you for your reply . I appreciate your help and support in solving this
one!

Best,

How12

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