The December 31,2009 balance sheet shows net fixed assets of $150,000 and the December 31,2010 balance sheet shows net fixed assets of $250,000.Depreciation expense for 2009 is $25,000 and depreciation expense for 2010 is $35,000.Based on this information,the cost of fixed assets purchased during 2010 is
A) $100,000.
B) $110,000.
C) $135,000.
D) $160,000.

Question

Quizplus · Accepted Answer

The cost of fixed assets purchased during 2010 can be calculated by adding the net increase in fixed assets to the depreciation expense for the year. The net increase is $250,000 (end balance) - $150,000 (start balance) = $100,000. Adding the depreciation expense for 2010 ($35,000) gives a total of $135,000.

The December 31,2009 Balance Sheet Shows Net Fixed Assets of $150,000