On 31 March 20X9 a machine was sold which cost $20,000 on 1 May 20X5. The profit on disposal was $1,500. The depreciation policy is 20% pa straight line, with a full year being charged in year of acquisition and none in the year of sale. The year end is 31 December. The sale proceeds were $________________
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
On 31 March 20X9 a machine was sold which cost $20,000 on 1 May 20X5. The profit on disposal was $1,500.
The
the year of sale. The year end is 31 December.
The sale proceeds were $________________.
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