A machine acquired for £360,000 on 19th April 2015 and depreciated annually at 10% of cost is sold for £240,000 on 18th August 2019. A full year’s depreciation is charged in the year of acquisition and no depreciation in the year of disposal. What is the gain or loss on disposal in the year ending 31st December 2019?
Added by Alfonso P.
Step 1
Step 1: Calculate the annual depreciation expense Annual depreciation expense = 10% of cost = 10% * £360,000 = £36,000 Show more…
Show all steps
Your feedback will help us improve your experience
Oluwadamilola Ameobi and 91 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Workman Company purchased a machine on January 2, 2020, for $800,000. The machine has an estimated useful life of 5 years and a salvage value of $100,000. Depreciation was computed by the 150% declining-balance method. What is the amount of accumulated depreciation at the end of December 31, 2021?
Oluwadamilola A.
A machine was purchased on 2nd July 2016 for $1,200,000. It was traded in for a new one whose price was $1,000,000 on 2nd June 2020, and the company paid $300,000 for this exchange. The policy of the company is to charge depreciation for its PP&E at 10% on cost per annum. Depreciation is charged in full during the year of purchase, but no depreciation is charged in the year of disposal. Required: Prepare the following accounts for the year ended 31st December 2020: Machinery account Accumulated depreciation account Machinery disposal account
Akash M.
Glacier Company purchased a machine which was installed and put into service on January 1, 2019 at a total cost of $128,000. Residual value was estimated at $8,000. The machine is being depreciated over eight years. How much is the depreciation for the year?
Aya Bianca I.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
100,000+
Students learning Accounting with Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD
