The following assets are included in Fortible Auto Parts, Inc.'s December 31, 2016, balance sheet. $\begin{array}{lr}
\text { Accounts Receivable } & \$ 65,000 \
\text { (net of Allowance for Uncollectible Accounts) } & \
\text { Accumulated Depreciation, Building } & 32,000 \
\text { Building } & 150,000 \
\text { Cash } & 80,000 \
\text { Land } & 160,000 \
\text { Merchandise Inventory } & 90,000 \
\text { Trademark } & 125,500
\end{array}$ The total dollar amount of assets classified as property, plant, and equipment on Fortible Auto Part's December 31, 2016, classified balance sheet is:
A) $250,000.
B) $310,000.
C) $278,000.
D) $375,000.

Question

Quizplus · Accepted Answer

Property, plant, and equipment (PP&E) assets include tangible assets that are used in operations and have a useful life of more than one year. In this case, PP&E includes Building ($150,000) and Land ($160,000). Accumulated Depreciation is a contra-asset account and does not represent a tangible asset itself; it reduces the carrying amount of the building but is not counted as a separate asset. Therefore, the total for PP&E is $150,000 (Building) + $160,000 (Land) = $310,000. However, the correct calculation should consider the net value of the building after accumulated depreciation, which is not directly provided in the options. The inclusion of Accumulated Depreciation in the calculation was an oversight. The correct calculation for PP&E should only include the gross amounts of Building and Land, leading to the realization that the provided options may not directly reflect the correct handling of accumulated depreciation in the calculation of PP&E.

The Following Assets Are Included in Fortible Auto Parts, Inc