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 | 50,000 | |
| Less depreciation | (5,000) | |
| Proceeds | 6,250 | |
| Loss | 1,250 | |
| carrying amount of disposal | (7,500) | |
| Therefore carrying amount | 37,500 |