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At 30 september 2002 the following balance
plant & equipement:
cost 860000$
accumulated depreciation 397000$during the year ended 30september 2003 plant witha a written value of 37000$ was sold for 49000$.The plant had orginally cost 80000$.Plant purchased during the year cost $180000.it is the company’s policy to charge a full years depreciation in the year of acquisition of an asset and none in the year of sale, using a rate of 10% on the straight line basis.
what is the carrying value should appear in that company of Finanacial postion at 30 september 2003 for plant and equipement.????
plz ans me sir ???
i m not clear that conceptHave you watched the free lectures on depreciation?
Because there is a full years depreciation in the year if purchase and none in the year of sale, we need to remove the cost of the assets sold and add the cost of the assets purchases before calculating the depreciation.
Therefore it is 10% x (860,000 – 80,000 + 180,000)
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