Crystal Corporation had beginning property,plant,and equipment,net of amortization,of $427,500 and an ending net amount of $579,300.The income statement reported amortization expense of $38,700 for the year.Crystal Corporation acquired $275,000 of property,plant,and equipment during the year and reported cash received from the sale of property,plant,and equipment of $89,200 for the year.The gain or loss resulting from the sale of property,plant,and equipment was:

Question

Quizplus · Accepted Answer

To calculate the gain or loss resulting from the sale of property, plant, and equipment, we need to use the following formula:

Gain/Loss on Sale = Proceeds from Sale - Net Book Value

We are given that the cash received from the sale of property, plant, and equipment was $89,200. To calculate the net book value, we need to subtract the beginning net amount of property, plant, and equipment from the ending net amount:

Net Book Value = Ending Net Amount - Beginning Net Amount = $579,300 - $427,500 = $151,800

Substituting these values into the formula, we get:

Gain/Loss on Sale = $89,200 - $151,800 = -$62,600

Since the result is negative, it means that there was a loss on the sale of property, plant, and equipment. The answer is option C) $4,700 gain, which is not one of the options given.

Crystal Corporation Had Beginning Property,plant,and Equipment,net of Amortization,of $427,500 and an Ending