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Accounting

  • 31-05-2007 6:54pm
    #1
    Choc.Monster
    Closed Accounts Posts: 18 ✭


    Im just wondering could anyone help me out...

    On the 1997 exam question one of the adjustments is "Included in the figure for sale of scrap materials is £500 received for the sale of obsolete machinery. This machinery cost £2000 on 1/4/1992. the cheque had been entered the in bank account. These were the only entries made in the books." The books for 1996 are being done and depreciation on Machinery is at 20%. I've seen to completely different things done on this, both with different answer. I just want to know how long do you consider to have had the obsolete machinery?

    I hope my question made sense! And I hope someone can help me!


Comments

  • #2
    cson
    Registered Users, Registered Users 2 Posts: 14,500 ✭✭✭✭cson


    Had machine for 57 months
    Originally cost £2000

    > Dep @ 20%

    £2000 x 0.2 = 400 divide by 12 multiply by 57 to get total dep

    = 1900 total dep

    2000 (cost) - 1900 (total dep) = 100 value

    But sold for 500 so profit on sale (gain in the p/l) of 400

    *Remember to include 1996s dep in the p/l
    Take the cost of the machine out of machinery total cost.


  • #3
    Choc.Monster
    Closed Accounts Posts: 18 ✭Choc.Monster


    Thanks very much for clearing that up! :D


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