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    ronangoh's Avatar
    ronangoh Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Oct 10, 2009, 02:51 AM
    Depreciation and disposal of assets
    Hi all,


    Here's my qst:


    Kim owns a chinese restaurant. The business fixed assets include some kitchen equipment which cost $38000 when it was purchased on 1 Jan 08.

    It was decided that kitchen equipment should be depreciated using the straight line method. It was estimated that the equipment has a useful life of 5 years and a scrap value of $2000. Depreciation is recorded on 31 Dec each year.

    On march 28 2010, some of the kitchen equipment was sold for cash $520. The equipment had cost $4400 on 1 Jan 08; at the date of sale the equipment had a net book value of $2000.

    Required: Prepare the disposal account recording the profit and loss on sale theof the kitchen equipment .

    Thanks!
    hamzashakaa's Avatar
    hamzashakaa Posts: 161, Reputation: 8
    Junior Member
    		  
    #2

    Oct 11, 2009, 01:41 PM
    dr. Cash 520
    dr. Acc depr 2400
    dr. Loss on disposal 1480 (520-2000)
    Cr. Cost 4400
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
    		  
    #3

    Oct 12, 2009, 11:57 PM

    Have you read the part about where we aren't here to do people's homework for them? Yes, I realize you don't care, but you aren't really helping anyone by doing that.
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