The combined effect on total assets after both sales is:

The combined effect on total assets after both sales is:

• A. Assets decrease
• B. Assets unchanged
• C. Assets increase
• D. Not determinable

Answer: (C)

When assets are sold, the total assets change by the cash you receive minus the asset’s carrying value that you remove from the books. If you sell an asset for more than its book value, you add more cash than the asset’s book value you’re taking off, so total assets go up. Do this for both sales and add the differences together. If both sales yield proceeds above their respective carrying amounts, the combined difference is positive, meaning total assets increase. For example, selling one asset with a carrying value of 5 for 7 adds 2 to assets; selling another with a carrying value of 4 for 5 adds 1 more; together, total assets rise by 3. Since the problem states the combined effect is an increase, it aligns with the idea that the sum of cash received exceeds the combined asset values removed.

When assets are sold, the total assets change by the cash you receive minus the asset’s carrying value that you remove from the books. If you sell an asset for more than its book value, you add more cash than the asset’s book value you’re taking off, so total assets go up. Do this for both sales and add the differences together.

If both sales yield proceeds above their respective carrying amounts, the combined difference is positive, meaning total assets increase. For example, selling one asset with a carrying value of 5 for 7 adds 2 to assets; selling another with a carrying value of 4 for 5 adds 1 more; together, total assets rise by 3. Since the problem states the combined effect is an increase, it aligns with the idea that the sum of cash received exceeds the combined asset values removed.