Chp 11 Sale of non-current assets Flashcards
Explain to Mdm Loh the journal entries for recording SALE of a non-current asset. Don’t fall into SCAM.
Explain the transaction on Jun 1
Business sold motor vehicles costing $30 000 and received cheque $20 000, It has depreciated by $6 000 since the business bought it.
Explain the transaction on Dec 31
The profit for the year has REDUCED by $4 000 as a result of the LOSS on sale of machinery.
Equipment costing $10 000 was sold on credit for $12 000. It has been depreciated by $2 000. Calculate the gain or loss on sale of equipment.
Net book value = $8 000
Proceeds = $12 000
Sale of non-current asset = $4 000
On 1 Jan 2018__, KK bought equipment for $40 000 on credit.
Depreciation on equipment at 10% per annum using the straight-line method and charges no depreciation in the year of sale.
On 31 July 2020, the equipment was sold for $37 000 on credit to Ting.
Financial year ends on 31 December.
Calculate the gain or loss on sale of equipment.
Cost = $40 000
Acc dep = 10% x $40 000 (2 years) = $8 000
NBV = $32 000
Proceeds = $37 000
Gain on sale of equipment = $5 000
