Cost price of equipment purchased on 1st January of current year is $ 1,030
Estimated useful life = 10 years
Salvage value of the equipment = $ 80
Annual depreciation on equipment under straight line method = [ original cost + installation charges - salvage value] / no of working life in years
Annual depreciation = [$ 1,030 + $ 0 - $ 80] / 10 = $ 95
Cash received $ 464 for selling an equipment having a book value of $ 458 less accumulated depreciation of $ 50 so gain on disposal of plant assets =$ 464 - {$ 458 - $ 50} = $ 56
Journal entry
Date | Particulars | Debit | Credit |
31 December of current year | Cash | $ 464 | |
Accumulated depreciation | $ 50 | ||
Equipment | $ 458 | ||
Gain on disposal of plant assets | $ 56 |
What was the gain of plant disposal?
Gain on disposal of plant assets
Particulars | Amounts ( $) | Particulars | Amounts ( $) |
31 December | $ 56 |
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