Lovell Company reported the following information related to its long-term asset

Question

Lovell Company reported the following information related to its long-term assets:

In addition, the company disclosed that it sold equipment with a historical cost of $26,000 for $22,000.

Using this information, compute cash paid for property, plant, and equipment.

Property, plant, and equipment, beginning balance $240,000 Property, plant, and equipment, ending balance 270,000 Accumulated depreciation, beginning balance 69,500 Accumulated depreciation, ending balance 79,000 Depreciation expense 9,500

Explanation / Answer

Property, plant, and equipment, ending balance = Property, plant, and equipment, beginning balance+new equipment purchased- equipments sold

270,000 = 240,000 + new equipment -26000

new equipment = $56,000

cash paid for property, plant, and equipment = $56,000

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