Unit 5

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
Can anyone help!<BR><BR>if you have the follwoing<BR><BR>Cost of asset £48,210 expected life 6 years and a residual of £4,000 using straingline method<BR><BR>Depreciation chg for year 1 £7,368.33<BR>Provision at end of year 1 £7,368.33<BR>Net Book Value year 1 £40,841.67<BR><BR>What is the disposal proceeds?? i dont understand this! can someone please help it is driving me mad!

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Unit 5

    Dave<BR><BR>Do you have the exact question?<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Unit 5

    hiya,<BR>i work out the disposal proceeds to be £4000.02, i calculated the depreciation charge for year one *6 as it has a life span of six years, took that figure of the value of the product which left me with £4000.02, which sounds correct, as you say that the residual value is £4000<BR>hope this helps
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Unit 5

    THE question is as follows,<BR><BR>Cost Expected life Scrap Value Method Depreciation chg Prov at end NBV @ Disposal<BR> for year of the year end of year Proceed<BR><BR>£48,210 6 years £4,000.00 Straight line £7,368.33 7,368.33 40,841.67<BR> £7,368.33 14,736.66 33,473.34<BR> £7,368.34 22,105.00 26,105.00 <BR><BR>What is the disposal proceeds and what is the profit and loss on disposal???<BR><BR>Can anyone help?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Unit 5

    <BR>As far as I can see the Net book value of the equipment is £4000.02, which is the amount that should be carried down to the disposal account when the item is disposed off. As you don't know what the item was sold for I don't see how you can work out the profit or loss on the equipment.<BR><BR>Hope that helps

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