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Hi sir,
plz help.
Question:
Plant and equipment sold during the year for $15,000 had originally cost $60,000 five years ago. The plant and equipment were depreciated on the straight line basis over six years. Any gain/loss on disposal has been included in overheads.
Overheads include the annual depreciation charge of $100,000 for property and $230,000 for plant and equipment.
Calculate the gain/loss on disposal.
Gain/Loss on disposal= Proceeds- CV
Proceeds=15,000
CV= Original amount- accum depreciation
=60,000- ????my issue is the accumulated depreciation…there is not straight line % or any information on depreciation charge for plant and equipment , apart from the comment on annual depreciation charge of $230,000 for plant and equipment..
what am I missing?? plz help!
Thanks
sorry I am being so silly!! I should really read the question again and again! I think I am due a coffee break!!
Accumulated depreciation = (60,000-0)/6 years
=10,000 *5=50,000 because plant was bought 5 years ago.therefore CV=Proceeds-cv
=60,000-50,000
=10,000 gain on dispoal!!
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