This Application Problem is a part of the Lesson 11, Unit 5, Grade 2. Since students are not expected to work the algorithm without place value charts and manipulatives in Grade 2, allow students to use place value disks to calculate the solution and explain their thinking. They can even use straws to represent the pencils in the Application Problem. Mr. Arnold has a box of pencils. He passes out 27 pencils and has 45 left. How many pencils did Mr. Arnold have in the beginning?