Thunder Corporation had a beginning balance in net plant assets of $220,000. During the year, Thunder purchased $60,000 of new plant assets. Depreciation expense for the year was $30,000 and there was a net gain on the sale of plant assets was $3,000. The ending balance in net plant assets was $170,000. The cash received from the sale of the plant assets was:
A)$80,000.
B)$88,000.
C)$83,000.
D)none of the above.

Question

Quizplus · Accepted Answer

The ending balance is calculated as: Beginning balance ($220,000) + Purchases ($60,000) - Depreciation ($30,000) - Book value of assets sold = Ending balance ($170,000). Solving for the book value of assets sold gives $80,000. Since there was a $3,000 gain, the cash received was $80,000 + $3,000 = $83,000.

Thunder Corporation Had a Beginning Balance in Net Plant Assets