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Hi Mr John.
The carrying value of a company’s non-current assets was 200,000 at 1 August 20X0.During the year ended 31 July 20X1, the company sold non-current assets for 25,000 on which it made a loss of 5000.The depreciation charge for the year was 20,000.What was the carrying value of non-current assets at 31 July 20X1?
Like you explained in the lecture, In terms of Dispoal Account on debit side I should put in cost of asset and credit side cash for sale and depreciation…..So the question is how do I know what part of whole depreciation charge(20,000) belongs to the asset I’m selling….
I find it very confusing….Thank you..
If they sold assets for 25000 and made a loss of 5000, then the carrying value must have been 30,000.
So the carrying value at the end of the year must be 200,000 (at the start) minus 30,000 (the carrying value of those sold) minus 20,000 (the depreciation for the year).