A machine cost €22,000 in 2011. It was depreciated at 20% per annum using the reducing balance method.
It had an expected useful life of seven years and an expected residual value of €4,614.
A full year’s depreciation was expensed in the year of purchase and none in the year of disposal.
The machine was disposed of in 2014 for €11,000.
What is the amount of the loss on disposal of the machine?
Only numbers are allowed!Please enter a value before submitting!
hintsolutionsimilar question
1190
Solution
€
Cost
22,000
Depreciation 2011
(4,400)
17,600
Depreciation 2012
(3,520)
14,080
Depreciation 2013
(2,816)
Carrying amount 2014
11,264
Proceeds 2014
11,000
Loss on disposal
264
Note:
Tolerance for submitted answers (plus or minus)
zero
1190
Depreciate the cost of the machine from 2011 to 2013 inclusive on a reducing balance basis to calculate the carrying amount of the machine at the beginning of 2014.
Compare the proceeds with the carrying amount to calculate the loss on disposal.
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