Question

Peter Company has gross property, plant and equipment totaling $1.5 million, depreciation expense this year of $250,000, and accumulated depreciation last year of $550,000. What is Peter's net property, plant and equipment?

Answer 1

Peter's net property, plant and equipment is $700,000.

Step-by-step explanation:

Net Property, plant, and equipment is the Carrying value of PPE. It is also known as the Book value of PPE. This is the value at which PPE is stated on the face of Statement of Financial Position.

The formula to calculate it as follows:

Cost - Accumulated Depreciation = Carrying Value

Simply put values:

1,500,000 - (250,000 + 550,000) = $700,000.

Thanks!