Adjustment on the cost of non current asset

as at 31 December 20X4:

Plant and equipment 21,000 Accumulated 9,000
Carrying amount 12,000

(b) The balance of the account is the proceeds of sale of some plant on 1 January 20X4 with a
carrying amount at the date of sale of $700,000 and which had originally cost $1,400,000. No
other accounting entries have yet been made for the disposal apart from the cash book entry for
the receipt of the proceeds. Depreciation on plant has been charged at 25% (straight line basis)
in preparing the draft statement of financial position without allowing for the sale. The
depreciation for the year relating to the plant sold should be adjusted for in full.

Solution:
Workings
1 Plant and equipment
$’000
Disposal – Cost 1,400
– Depreciation (700)
– Carrying amount 700
Proceeds (part (a)) (600)
Loss on sale 100
Cost adjustment 21,000 – 1,400 = 19,600
Accumulated depreciation adjustment (9,000 – 700 – (1,400 ? 25%)) = 7,950

Retained earnings
$’000
Per draft 12,400
Irrecoverable debts (200)
Inventory write down (500 – 360) (140)
Loss on disposal of plant (W1) (100)
Depreciation adjustment (1,400 ? 25%) (W1) 350
12,310.

Please I don’t understand the adjustments on the cost of plant and equipment ?