Question

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?

Answer 1

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

Step-by-step 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.