Respuesta :
To calculate the gain or loss on disposal of the machine, we need to follow these steps:
1. Calculate the accumulated depreciation up to the date of disposal.
2. Determine the carrying value of the machine at the date of disposal.
3. Compare the carrying value with the selling price to find the gain or loss.
Let's break it down:
1. Accumulated Depreciation:
The machine was purchased on April 1st, 2011, and sold on September 30th, 2016, which is a period of 5 years and 6 months.
Annual depreciation rate = 10% of cost
Depreciation for a full year = £360,000 * 10% = £36,000
Depreciation for 5.5 years = £36,000 * 5.5 = £198,000
2. Carrying Value at the Date of Disposal:
Cost of machine - Accumulated depreciation = £360,000 - £198,000 = £162,000
3. Gain or Loss on Disposal:
Selling price - Carrying value - Expenses of disposal = £112,000 - £162,000 - £3,000 = -£53,000
The negative result indicates a loss on disposal of £53,000.
Based on the information you provided, let's calculate the gain or loss on the disposal of the machine.
First, let's calculate the accumulated depreciation. Since the machine was acquired on April 1, 2011, and sold on September 30, 2016, the time period is 5 years and 6 months.
The annual depreciation rate is 10% of the cost, which is £360,000. So, the annual depreciation is £36,000 (£360,000 * 0.1).
The total depreciation over 5 years is £36,000 * 5 = £180,000.
The depreciation for the additional 6 months is £36,000 * 0.5 = £18,000.
Therefore, the accumulated depreciation is £180,000 + £18,000 = £198,000.
Next, let's calculate the net book value (NBV) of the machine. The NBV is the original cost minus accumulated depreciation.
NBV = £360,000 - £198,000 = £162,000.
Finally, let's calculate the gain or loss on disposal. The selling price is £112,000, and the expenses of disposal are £3,000.
Gain or Loss = Selling Price - NBV - Expenses of Disposal
= £112,000 - £162,000 - £3,000
= -£53,000.
Based on the calculations, the loss on the disposal of the machine to be reported is £53,000.
First, let's calculate the accumulated depreciation. Since the machine was acquired on April 1, 2011, and sold on September 30, 2016, the time period is 5 years and 6 months.
The annual depreciation rate is 10% of the cost, which is £360,000. So, the annual depreciation is £36,000 (£360,000 * 0.1).
The total depreciation over 5 years is £36,000 * 5 = £180,000.
The depreciation for the additional 6 months is £36,000 * 0.5 = £18,000.
Therefore, the accumulated depreciation is £180,000 + £18,000 = £198,000.
Next, let's calculate the net book value (NBV) of the machine. The NBV is the original cost minus accumulated depreciation.
NBV = £360,000 - £198,000 = £162,000.
Finally, let's calculate the gain or loss on disposal. The selling price is £112,000, and the expenses of disposal are £3,000.
Gain or Loss = Selling Price - NBV - Expenses of Disposal
= £112,000 - £162,000 - £3,000
= -£53,000.
Based on the calculations, the loss on the disposal of the machine to be reported is £53,000.
