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Hi. This question is from the Kaplan Study text (Appendix 1: Published Financial Statements – TYU 3)
My doubt is on how the profit on disposal of $100 was calculated. I hope you can help me understand. The relevant information:“…. During the year Marlon sold some catering equipment for $2500. This related to equipment that originally cost $5000 and had been depreciated by $2600. No entries have been made at all in the trial balance for this disposal”
I hope this is enough information. Thank you so much!
Hi,
The profit on disposal is the proceeds less the carrying value. The proceeds are $2500 and from the information given the carrying value is $2400 (5000 – 2600).
Thanks
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