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I always get confused with questions like this below. I need a simple analogy so i can attempt questions of this nature easily.
An asset register showed a carrying value of $67,460. A non current asset costing $15000 had been sold for $4000 making a loss on disposal $1250.No entries had been made in the asset register for the disposal. What is the correct balance in the asset register.
A. $42,710
B. $51,210
C. $53,710
D. $62,210The carrying value is the cost less the accumulated depreciation.
The assets sold had made a loss on disposal of 1,250 and therefore its carrying value must have been 4,000 + 1,250 = 5,250.
Therefore correct balance in the asset register after removing the carrying value of the asset sold must be 67,460 – 5,250 = 62,210.
Have you watched my free lectures on depreciation? The lectures are a complete free course for Paper FA (F3) and cover everything needed to be able to pass the exam well.
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