Accruals + Prepayments - ENGLIGHTEN ME PLEASE?!

AngelDust
AngelDust Registered Posts: 30
in AAT Level 3 (Level 6 in Scotland)
Hi everyone,

Q: An item of computer equipment originally purchased for £2,700 and with a carrying amount of £675 has been sold.

The loss on disposal was £150. A cheque for the proceeds was banked.

How much did the business receive for the computer equipment? Ignore VAT.

A: £525

My question is how did the answer come to £525? I can't work it out!

Thanks! :)

Comments

  • BeccaLouJ9
    BeccaLouJ9 Registered Posts: 896 Epic contributor 🐘
    The NBV of the equipment was £675- so this is basically what it is worth now, the loss on the disposal was £150 in the end, therefore the difference would be the amount of money received for the computer equipment.

    When you have the answer you can work it back as £675 NBV less sale proceeds £525 equals the loss of £150.

    Nothing to do with accruals/prepayments though.

    B xx
  • AngelDust
    AngelDust Registered Posts: 30
    Lol thanks @BeccaLouJ9 I think I was staring at the question too long and my brain had a meltdown - apologies for the misleading title :3

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