Question

A company has the following assets: $23,000,000 1,500,000 Buildings and Equipment, less accumulated depreciation of $4,000,000 Copyrights Patents Land 3,000,000 5,000,000 The total amount reported under Property, Plant, and Equipment would be:________ A) $32,500,000. B) $27,000,000. C) $29,500,000. D) $28,000,000.

Answer 1

Answer:

D) $28,000,000.

Explanation:

Property plant and equipment are intangible assets held by the business and those are not easily liquidated by the business and there should be an intention to hold the asset more than one year.

The property plant and equipment can be calculate as follow

Buildings and Equipment ________ $23,000,000

Patents Land _________________ $5,000,000

Total property, plant and equipment $28,000,000

As the aptent on land is also capital cost of the land, so patent of land values must be added in the property, plant and equipment value.