Who can figure this out? FSA question company, question, regarding, following, equipment

smuggycfa

Had a hard time on this one:
An analyst gathered the following information regarding the longlived assets of a company ($000):
20X2 20X1
Land $75 $60
Plant and equipment 640 592

715 652
Less: Accumulated 224 188
depreciation
Property, plant and $491 $464
equipment – net
Depreciation Expense $42
Capital expenditures 82
Proceeds from sale of equipment 18
The gain or loss from the sale of longlived assets during 20X2 was closest to ($000):
a. $5 gain.
b. $5 loss.
c. $13 gain.
d. $13 loss.
Answer : A

svgleeson

715  652 = 63 which is the net change in FA
Add back the depreciation of 42, so 63 + 42 = 105. 82 was spent on new FA, so subtract this from 105, leaving 23. Of this 23 amount, subtract the proceeds from the sale of FA (18) which leaves you with 5  which is the net gain
weird question really

jarobi04

Mihaz, could you explain the logic behind the way you calculated net value of assets without the sale? everything else made sense to me. thanks.

RealEstate_CFA

The follg formula ALWAYS WORKS.
PPE Net End = PPE Net Begin + Purchases  Depr  Sales
Sales above is the Book Value of the Sales.
Substituting
491=464+8242Sales
Sales=13
you are given you sold it for 18.
So you made a 1813= 5$ gain.
Ans A

meghanjackson

Sure. All the data is given. You add capital expenditures and substract depreciation.

spartan1

Much appreciated guys!
CP, your explanation is much more straightforward than Stalla. They presented with a T a/c which really drives me nuts.