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Basic Question 1 of 9
Nepster Inc. provides the following information from its accrual-basis financial statements:
12/31 Buildings (net): $300,000
Depreciation Expense: $25,000
B. $65,000
C. $85,000
1/1 Buildings (net): $280,000
12/31 Buildings (net): $300,000
Depreciation Expense: $25,000
How much did Nepster pay for buildings during the year if buildings with a book value of $40,000 were disposed of during the year?
A. $45,000
B. $65,000
C. $85,000
User Contributed Comments 6
| User | Comment |
|---|---|
| Jmiller74 | The question is written incomplete, it does not mention the change in the book value by 20K. |
| John1965 | Yes it is complete: the 20,000 comes from 300,000 - 280,000. |
| johntan1979 | There is no change in book value whatsoever. Book value of disposed asset = $40,000 $20,000 is Ending building - Beginning building = $300k - $280k |
| farhan92 | took me a minute or so to find the book value -.- |
| ascruggs92 | Start 280,000 Less: Depreciation Exp. (25,000) Less: Disposal of Assets (40,000) Buildings Acct. Balance before purchases 215,000 Purchases 85,000 Ending Balance: 300,000 |
| cfastudypl | using the fixed asset t-account: closing balance 300k + depreciation 25k + disposal value 40k less opening balance 280k = 85k(300+25+40-280) |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain and evaluate how impairment and derecognition of property, plant, and equipment and intangible assets affect the financial statements and ratios
CFA® 2024 Level I Curriculum, Volume 2, Module 7.