During the year,the Property,Plant,and Equipment account increased by $25,000 and the Accumulated Depreciation account increased by $2,000.In addition,the company sold equipment that originally cost $12,000 and had $9,000 of accumulated depreciation for $4,500.What was the cash inflow from the sale of property,plant,and equipment?
A) $1,500
B) $4,500
C) $15,500
D) $12,000

Question

Quizplus · Accepted Answer

To calculate the cash inflow from the sale of property, plant, and equipment, we need to deduct the accumulated depreciation from the original cost to determine the book value. Then, the cash inflow is the sale price minus the book value.

Book value = Original cost - Accumulated depreciation
Book value = $12,000 - $9,000
Book value = $3,000

Cash inflow = Sale price - Book value
Cash inflow = $4,500 - $3,000
Cash inflow = $1,500

Therefore, the cash inflow from the sale of property, plant, and equipment is $1,500 (Option A).

During the Year,the Property,Plant,and Equipment Account Increased by $25,000 and the Accumulated