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Sale of Non-Current Asset Question | ||
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Sale of Non-Current Asset Question
by Cheong
 What is the amount I should put into purchases for plant and equipment? Thanks a lot. A: To answer this, look at the plant and equipment account only (i.e. cost prices of plant and equipment): - We started with $795,000 - We sold an item that cost us $65,000 - We bought some plant and equipment for a certain amount (the answer we're looking for) - We had $1,290,000 of plant equipment at the end of the year. If we arrange this in a mathematical formula we would have: 795,000 - 65,000 + X = 1,290,000 X = 1,290,000 - 795,000 + 65,000 X = 560,000 So the purchases of plant and equipment for the year must have been $560,000. Make sense? By the way, I have detailed explanations of accumulated depreciation and depreciation (multiple lessons) and exercises on these topics in my basic accounting books . Best, Michael Celender Return to Ask a Question About This Lesson!. Enjoying this Website? |
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