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Hi, I need help with the question below:-
Ar 30th Sept 20X2, the following balances existed in the records of Lambda:
Plant and Equipment
Cost $860,000
Accumulated depreciation $397,000During the year ended 30th September 20×3,plant with a written down value of $37000 was sold for $49000.The plant had originally cost $80000.Plant purchased during the year cost $180,000. It is in 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 net amount should appear in Lamdba’s statement of financial position at 30 September 20X3 for plant and equipment?
cost=860k
cost after disposal=860k-80k=780k
acc’ depn of disposed asset=80k-37k=43knew cost after purchase=780k+180k=960k
dep’n exp=96k
acc’ dep’n =397k-43k+96k=450knet cost=960k-450k=510k ans.
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