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hi,
i am a bit thrown off by the taetment of the profit on disposal in the harrington qst. why is profit on disposal of plant & equipment being reduced from the cost of sales? i would totally get it if the figure being reduced was the cost of sellingthe P&E.
A profit ) or loss ) on the disposal of an asset is surely just a correction necessary because we have charged too much ( or too little ) depreciation on that asset. If depreciation is treated as a cost of sales item, then surely too must be the profit or loss on disposal
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