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An organisation’s asset register shows a carrying value of $145,600. The non current asset account in the nominal ledger shows a carrying value of $135,600. The difference could be due to a disposed asset not having been deducted from the asset register. which one of the following is correct.
A. Asset with disposal proceeds of $15000 and a profit on disposal of $5000
B.. Asset with disposal proceeds of $15000 and a carrying value of $5000
C.. Asset with disposal proceeds of $15000 and a loss on disposal of $5000
D.. Asset with disposal proceeds of $5000 and a carrying value of $5000The answer is A. Mr Moffat kindly help with an explanation. Thanks
The asset sold must have had a carrying value of 145,600 – 135,600 = 10,000.
Given that the profit on sale is equal to the proceeds of sale less the carrying value, then it is only A that gives a carrying value of 10,000.
Have you watched my free lectures on depreciation? The lectures are a complete free course and cover everything needed to be able to pass the exam well.
Thanks. yes i have watched the free lectures. got a little confused while solving questions on depreciation from revision kit.
I have a better understanding now.
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