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The following information was disclosed in the financial statements of a company for the year ended 31 December 2004.
Plant and equipment, cost. 735 000 (year 2004) 576 000 (year 2003)
accumulated depreciation 265 000 (2004) 315 000 (2003)
NBV 470 000 (2004) 261 000 (2003)
During 2004 :
expenditure on plant and equipment was : 512 000
loss on the disposal of old plant was : 107 000
depreciation charge : 143 000.what where the sales proceeds received on the disposal of the old plant.
A: 53 000
B 153 000
C 246 000
D 267 000ans-53000.
Accumulated depreciation on Machine sold- 193000
prepare provision for depreciation a/c & Fixed Assets a/c.
balance of provision for dep- 193000 & F.A -53000I don’t understand this question.
@vrushali said:
ans-53000.
Accumulated depreciation on Machine sold- 193000
prepare provision for depreciation a/c & Fixed Assets a/c.
balance of provision for dep- 193000 & F.A -53000I don’t get this one. Why did you deduct further depreciation charges? We have the NBV for 2003 and 2003 and the depreciation charge for 2004. So why wouldd we deduct a further depreciation charge?
In my calculation, the answer was 89,000, but it’s not in the options!
Regards,
i can get 53,000 for the asset account
i can get 193,000 for the acc dep a/chow to get 53,000 ? can show me nbv account/disposal a/c
or we just ignore nbv information
just open asset account and accumlated depreciation account?
cost account
_____________________
576 b/f
512 purch
disp X
_____________________
735
X = cost of disposal = 353depreciation account
_____________________
315 b/f
143
Y dispos
_____________________
265Y = depreciation of disposal = 193
NBV of disposal = 353 – 193 = 160
loss on disposal = NBV of disposal – proceeds of disposal
107 = 160 – proceeds of disposal
proceeds of disposal = 53disposal account
_____________________
353 cost
depr 193
loss 107
proce 53
_____________________
353
353good luck
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