A Accounting

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

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