I need help with a fiancial accounting question?
The sales are €1,239,600(31-12-07). the question says that €18,000 in respect of the disposal of an item of plant which was purchased in 2005 for €28,000. Please help! Should I adjust the sales figure and is the depreciation €10,000??
Investing - 2 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
There has to be more to the question. This doesn't make sense. The 10,000 would be a loss, not depreciation.
Answer 2 :
The disposal is not part of operations, so don't adjust the sales figure. The plant item should have had depreciation expense in 2005, 2006, and 2007 (through the date it was sold) already accounted for prior to 2007 year-end adjustments, therefore there is no need for depreciation expense on it at year-end.
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