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A business has accounting year end of 30 june. it purchases an item of plant on 1 april 20×5:
cost 15000, 3yrs maintainence 450 = 15450
at date of purchase, the plant had an estimated useful life of 5 years and residual val of 2000. this was traded for replacement on 30sep 20×8 at val 5000.
depre 20% SLM
profit/loss on disposal?after getting 2600(15000-2000 x 20%) how is the further caln to be done? the years to be considered should be 4 right? why have they showed as 3.5?
From 1 April 20×5 to 30 September 20×8 is 3.5 years.
The profit or loss on disposal is the difference between the sale price of 5,000 and the net book value as at 30 September 20×8 which is the cost less 3.5 years depreciation at 2,600 per year.
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