Beginning and ending Plant Assets, Net, were $ 120 comma 000 and $ 115 comma 000 , respectively. Depreciation for the period was $ 25 comma 000 , and purchases of new plant assets were $ 28 comma 000. Plant assets were sold at a loss of $ 5 comma 000. What were the cash proceeds of the sale?

Question

Jamiya Scott

Business

6 January, 04:54

Beginning and ending Plant Assets, Net, were $ 120 comma 000 and $ 115 comma 000 , respectively. Depreciation for the period was $ 25 comma 000 , and purchases of new plant assets were $ 28 comma 000. Plant assets were sold at a loss of $ 5 comma 000. What were the cash proceeds of the sale?

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Answers (1)

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Susan · Answer 1

The cash proceeds of the sale is $3,000.

Explanation:

We have the equation as below:

Total beginning net book value of Plant assets + Total plant asset purchased during the period - Total depreciation recorded of plan asset during the period - Net book value of plant asset sold during the period = Net closing book value of Plant assets.

Thus, we have:

120,000 - 25,000 + 28,000 - Net book value of plant asset sold during the period = 115,000 Net book value of plant asset sold during the period = 8,000.

We also have the equation as below:

Sales proceed - Net book value of plant asset sold during the period = Gain / (loss) on asset disposal.

Thus, we have:

Sales proceed - 8,000 = - 5,000 Sales proceed = $3,000.