Question

A company reported beginning plant assets, net of depreciation, of

$ 735 comma 550$735,550 ;

and, an ending amount of

$ 660 comma 000$660,000.

Depreciation expense of

$ 51 comma 400$51,400

and a loss on the sale of equipment of

$ 5 comma 500$5,500

were reported on the income statement. The company acquired

$ 216 comma 800$216,800

of plant assets during the year. How much will be reported as cash received from the sale of equipment in the investing activities section of the statement of cash flows?

A. The cash received upon the sale of the equipment was

$ 240 comma 950$240,950.

B. The cash received upon the sale of the equipment was

$ 286 comma 850$286,850.

C. The cash received upon the sale of the equipment was

$ 246 comma 450$246,450.

D. The cash received upon the sale of the equipment was

$ 235 comma 450$235,450.

Answer 1

Beginning plant assets	735550
Less: Ending plant assets	-660000
Add: Depreciation expense	-51400
Add: Acquisition of plant assets	216800
Book value of equipment sold	240950
Cash received upon the sale of the equipment = 240950-5500= $235450
Option D The cash received upon the sale of the equipment was $235,450 is correct