Depreciation non current asset

This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.

Viewing 4 posts - 1 through 4 (of 4 total)

Author
Posts
August 19, 2020 at 7:53 pm #581231
ketki15
Member
- Topics: 60
- Replies: 15
a business non current asset had a carrying amount of 125000. An asset had a cost of 12000 was sold for 9000 at a profit of 2000. what is revised carry amt?
can you please explain its solution regarding why do have to substract 2000 from 9000?
August 20, 2020 at 6:35 am #581258
John Moffat
Keymaster
- Topics: 57
- Replies: 54846
If the asset was sold for 9,000 then for the profit to be 2,000 it means that the carrying value (net book value) must have been 7,000.
Have you watched my free lectures on non-current assets?
October 21, 2020 at 8:37 pm #591032
ketki15
Member
- Topics: 60
- Replies: 15
I’m still unclear. If it is a profit shouldn’t we add 9000+2000?
October 22, 2020 at 8:36 am #591071
John Moffat
Keymaster
- Topics: 57
- Replies: 54846
No. If they make a profit then the selling price of 9,000 must be more than the NBV.
You are hardly going to make a profit by selling something with a NBV of 11,000 for only 9,000!
Author
Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.