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hai john sir
ABK CO BOUGHT A PROPERTY ON 31 DECEMBER 20X3 FOR$340,000.AT THE DATE OF PURCHASE ,ABK CO ESTIMATED USEFUL LIFE IS 32 YEARS.ON 31 DECEMBER 20X5,THE PROPERTY WAS REVALUED TO $410000.THE THERE WAS NO CHANGE IN THE USEFUL LIFE .ON 30 JUNE20X7 ,ABK CO SOLD THE PROPERTY ON A STRAIGHT LINE BASIS,WITH A PROPORTIONAL CHARGE IN THE YEARS OF PURCHASE AND DISPOSAL .WHAT IS THE PROFIT FOR DISPOSAL OF THE PROPERTY ON 31 DEECEMBER 20X7
SIR I GOT THE ANWER 96250 BUT THE ANSWER IS GIVEN AS:95500
SO SIR WHAT IS THE CORRECT ANSWER
SO SIR IF HAVE TIME PLASE SOLVE THE QUESTION THROGH STEP BY STEP
REGARDS,
AHLAM AMINAPlease do not type in capital letters.
You have not typed out the whole question because you have not said what the property was sold for.
However, because someone else asked about the same question six years ago I found that the property was sold for $485,000.The correct answer is indeed $95,500.
As at 31 Dec 2005, the property has been owned for 2 years, is revalued and so now stands at $410,000.
The useful life remaining is 30 years, and so the deprecation from then on is 410,000/30 per year.
It is sold 1.5 years later, so the carrying value at the date of sale is 410,000 – (410,000/30 x 1.5) = $389,500.
It is sold for $485,000, so the profit on disposal is $485,000 – $389,500 = $95,500.
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