Question

Consider the following facts for Coffee Cup:

Requirements 1. How much are cash dividends? 2. What was the amount of the cash receipt from the sale of plant assets? Requirement 1. How much are cash dividends? Cash dividends are $ 30000 Requirement 2. What was the amount of the cash receipt from the sale of plant assets? The cash receipt from the sale plant assets is $ i More Info -X a. Beginning and ending Retained Earnings are $45,000 and $74,000, respectively. Net income for the period is $59,000. b. Beginning and ending Plant Assets are $123,700 and $132,700, respectively. c. Beginning and ending Accumulated Depreciation-Plant Assets are $19,700 and $23,700, respectively. d. Depreciation Expense for the period is $14,000, and acquisitions of new plant assets total $25,000. Plant assets were sold at a $5,000 gain.

Answer 1

Answer

Clsoing Retained earning balance=Opening Reatined earning balance+Net income-Cash Dividends

Cash dividends=$45,000+$59,000-$74,000

Cash dividends=$30,000

Ending Accumulated depreciation=Opening accumulaetd depreciation +Depreciation expense-Accumulated depreciation on Asset sold

Accumulated depreciation on asset sold=19,700+14,000-23,700=$10,000

Coffee cup
Plant Assets
Begining balance	$      1,23,700	Accumulated depreciation	$         10,000
Cash	$         25,000	Cash received	$           6,000
		Clsoing balance	$      1,32,700
	$      1,48,700		$      1,48,700
Coffee cup
Accumulated Depreciation
Depreciation asset sold	$         10,000	Beginning balance	$         19,700
		Depreciation expense	$         14,000
Ending balance	$         23,700
	$         33,700		$         33,700

Assets ending balance=Opening balance+Cash paid for acquired assets-Accumulated depriciation-Cash received on asset sold represneting net book value

Cash received on asset sold represneting net book value=123,700+25,000-10,000-132,700

=$6,000

Cash received on Sale of plant asset=Cash on asset sold foer Net book value+Gain on sale

=$6,000+$5,000

Cash received on sale of Plant Asset=$11,000