The carrying amount of a company’s non-current assets was $100,000 at 1 August 20X2. During the year ended 31 July 20X3, the company sold non current assets for $12,500 on which it made a loss of $2,500. The depreciation charge of the year was $10,000.
What was the carrying amount of noncurrent assets at 31 July 20X3?
Answer
Gain(loss) = proceeds – carrying amount
Carrying amount = proceeds – gain(loss)
| $ | |
| Carrying amount at 1st August 20X2 | 50,000 |
| Less depreciation | (5,000) |
| 45,000 | |
| Proceeds | 6,250 |
| Loss | 1,250 |
| Carrying amount of asset sold | (7,500) |
| Therefore carrying amount | 37,500 |