Shuswap MTQ - Preparing Basic Financial Statements

I can't understand the second task of BPP Exam kit MTQ 19.1. 19.1 Shuswap The draft statement of financial position shown below has been prepared for Shuswap, a limited liability company, as at 31 December 20X4: Accumulated Carrying Cost depreciation value $'000 $'000 $'000 Assets Non-current assets Land and buildings 9,000 1,000 8,000 Plant and equipment 21,000 9,000 12,000 30,000 10,000 20,000 Current assets Inventories 3,000 Receivables 2,600 Cash at bank 1,900 Total assets 27,500 Equity and liabilities Equity Issued share capital (ordinary shares of 50c each) 6,000 Retained earnings 12,400 Non-current liabilities Loan notes (redeemable 20Y0) 2,000 Current liabilities Trade payables 2,100 22,500 Suspense account 5,000 27,500 Task 2 The suspense account is made up of two items: (a) The proceeds of issue of 4,000,000 50c shares at $1.10 per share, credited to the suspense account from the cash book. (b) The balance of the account is the proceeds of sale of some plant on 1 January 20X4 with a carrying amount at the date of sale of $700,000 and which had originally cost $1,400,000. No other accounting entries have yet been made for the disposal apart from the cash book entry for the receipt of the proceeds. Depreciation on plant has been charged at 25% (straight line basis) in preparing the draft statement of financial position without allowing for the sale. The depreciation for the year relating to the plant sold should be adjusted for in full. I don't understand how the sale proceeds and loss is worked out. Answer There is $100,000 loss on disposal. $'000 Carrying amount 700 Proceeds (5,000,000 – (4,000,000 × $1.10)) (600) Loss 100 The depreciation adjustment is $350,000 (1,400,000 × 25%)