• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Mini exercise- Pg210 Leasehold non-current asset

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Mini exercise- Pg210 Leasehold non-current asset

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by MikeLittle.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • March 10, 2017 at 7:57 am #377326
    maryam13
    Member
    • Topics: 11
    • Replies: 0
    • ☆

    Hi,

    The ACCA F7 Paper: Exercise 6-Q4

    I looked at the answer on Pg 241 but I’m slightly confused on the working for the plant disposal journal entry, I really appreciate if anyone could please explain the figure.

    ‘On 1 October 2008 an item of plant was disposed of for $2.5 million cash. The proceeds have been treated as sales revenue by Candel. The plant is still included in the above trial balance figures at its cost of $8 million and accumulated depreciation of $4 million (to the date of disposal).’

    Thanks.

    March 10, 2017 at 10:06 am #377342
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    The double entry that Candel has put through is:

    Dr Cash $2.5 million
    Cr Revenue $2.5 million

    and that is incorrect – it should not be classed as revenue

    So, reverse that bad entry by:

    Dr Revenue $2.5 million
    Cr Cash $2.5 million

    and now we are back to square one with a clean start and we can put through the correct entries

    The plant has a carrying value of $4 million (cost account $8 million and accumulated depreciation account $4 million) and we sell it for $2.5 million

    So remove the cost from the cost account and the accumulated depreciation from the accumulated depreciation account and double enter those two values to a disposal account

    Dr Disposals $8 million
    Dr Accumulated depreciation $4 million
    Cr Plant $8 million
    Cr Disposals $4 million

    Now the Disposals account shows the net carrying value of the plant that we have sold

    Now record the cash proceeds

    Dr Cash $2.5 million
    Cr Disposals $2.5 million

    Balance off the Disposals account and double enter the balance to the statement of profit or loss / Loss on disposal of TNCA

    Dr Statement of profit or loss / Loss on disposal of TNCA $1.5 million
    Cr Disposals $1.5 million

    Is that better?

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Mini exercise- Pg210 Leasehold non-current asset’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • umangkumbhat on What is Assurance? – ACCA Audit and Assurance (AA)
  • ahmadhoney on How to register with ACCA?
  • John Moffat on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • osman-the-zephyr@ on MA Chapter 1 Questions Accounting for Management
  • adebusola on MA Chapter 1 Questions Accounting for Management

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in