Carrying amount of non current assets ( video below)
The carrying amount of a company’s non-current assets was $50,000 at 1 August 20X4. During the year ended 31 July 20X5, the company sold non-current assets for $6,250 on which it made a loss of $1,250. The depreciation charge for the year was $5,000. What was the carrying amount of non-current assets at 31 July 20X5?
Answer
Gain(loss) on disposal = proceeds – carrying amount of disposal
Carrying amount of disposal = proceeds – gain(loss)
| $ | $ | |
| Carrying amount at 1st August 20X4 | 50000 | |
| Less depreciation | (5000) | |
| Proceeds | 6250 | |
| Loss | 1250 | |
| carrying amount of disposal | (7500) | |
| Therefore carrying amount | 37500 |