harrington

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This topic contains 1 reply, has 2 voices, and was last updated by Avatar of MikeLittle MikeLittle 2 years, 6 months ago.

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  • December 1, 2010 at 6:06 pm #46475
    Avatar of sichom02
    sichom02
    Participant

    hi,

    i am a bit thrown off by the taetment of the profit on disposal in the harrington qst. why is profit on disposal of plant & equipment being reduced from the cost of sales? i would totally get it if the figure being reduced was the cost of sellingthe P&E.

    December 2, 2010 at 1:53 pm #72292
    Avatar of MikeLittle
    MikeLittle
    Keymaster

    A profit ) or loss ) on the disposal of an asset is surely just a correction necessary because we have charged too much ( or too little ) depreciation on that asset. If depreciation is treated as a cost of sales item, then surely too must be the profit or loss on disposal

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