Royal Plastics provides the following information about its moulding machinery: $\begin{array}{ll}
\text {Opening balance of machinery account }&\$500,000\
\text { Closing balance of machinery account }&\$650,000\
\text {Depreciation expense for the year }&\$50,000\
\text {Depreciation charged on machinery sold }&\$130,000\
\text { Profit on sale of machinery}&\$20,000\
\text { Caryving value of machinery sold}&\$90,000\
\end{array}$

- What is the total cost of machinery purchased during the year?

Question

Royal Plastics provides the following information about its moulding machinery: $\begin{array}{ll}
\text {Opening balance of machinery account }&\$500,000\
\text { Closing balance of machinery account }&\$650,000\
\text {Depreciation expense for the year }&\$50,000\
\text {Depreciation charged on machinery sold }&\$130,000\
\text { Profit on sale of machinery}&\$20,000\
\text { Caryving value of machinery sold}&\$90,000\
\end{array}$

- What is the total cost of machinery purchased during the year?

Quizplus · Accepted Answer

The total cost of machinery purchased during the year is $370,000. This is calculated by adding the opening balance of the machinery account ($500,000), the depreciation expense for the year ($50,000), and the profit on sale of machinery ($20,000), and then subtracting the closing balance of the machinery account ($650,000) and the carrying value of machinery sold ($90,000).

Royal Plastics Provides the Following Information About Its Moulding Machinery