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Your firm has total assets of $16 million of which $5 million are current assets. The gross plant and equipment has a value of $18 million.
What is the amount of accumulated depreciation?
Expert Answer
Total assets = Current assets + Fixed assets
$16 million = $5 million + Fixed assets
Fixed assets = $16 million – $5 million
Fixed assets = $11 million
Fixed assets(Net plant and equipment) = Gross plant and equipment – Accumulated depreciation
$11 million = $18 million – Accumulated depreciation
Accumulated depreciation = $18 million – $11 million
Accumulated depreciation = $7 million
