Below is selected information taken from the balance sheet of Huy Corporation as of 12/31/06. $\begin{array}{lrr}
&\underline{12 / 31 / 05}&\underline{12 / 31 / 06}\
\text { Land } & \$ 100,000 & \$ 100,000 \
\text { Machines } & \underline{80,000} & \underline{70,000} \
\text { Gross property, plant, \& equipment } & 180,000 & 170,000 \
\text { Accumulated depreciation } & \underline{25,000} & \underline{10,000} \
\text { Net property, plant, \& equipment } & \underline{\$ 155,000} & \underline{\$ 160,000} \
\text { Depreciation expense } & & \$ 5,000
\end{array}$

-During fiscal 2006, Huy sold fully depreciated assets that originally cost $20,000 for $4,000. In 2006, they purchased assets that cost:
A)$5,000.
B)$6,000.
C)$10,000.
D)$30,000.

Question

Below is selected information taken from the balance sheet of Huy Corporation as of 12/31/06. $\begin{array}{lrr}
&\underline{12 / 31 / 05}&\underline{12 / 31 / 06}\
\text { Land } & \$ 100,000 & \$ 100,000 \
\text { Machines } & \underline{80,000} & \underline{70,000} \
\text { Gross property, plant, \& equipment } & 180,000 & 170,000 \
\text { Accumulated depreciation } & \underline{25,000} & \underline{10,000} \
\text { Net property, plant, \& equipment } & \underline{\$ 155,000} & \underline{\$ 160,000} \
\text { Depreciation expense } & & \$ 5,000
\end{array}$

-During fiscal 2006, Huy sold fully depreciated assets that originally cost $20,000 for $4,000. In 2006, they purchased assets that cost:
A)$5,000.
B)$6,000.
C)$10,000.
D)$30,000.

Quizplus · Accepted Answer

The net increase in property, plant, and equipment is $5,000 ($160,000 - $155,000). Since they sold fully depreciated assets for $4,000, the original cost was $20,000, and the depreciation expense was $5,000, the purchase of new assets must have been $10,000 to account for the net increase.

Below Is Selected Information Taken from the Balance Sheet of Huy