Disposal and Balance Day Adjustment

An equipment cost $10000. Depreciation to date was $2750. It is disposes of for $6000. Calculate the gain or loss on sale of the equipment.

• loss $1250

• profit $1250

• loss $3250

• profit $3250

How is loss on the sale of a non-current recorded

• Dr. - Disposal

  Cr - Income Statement

• Dr. - Non-current asset

  Cr. - Income Statement

• Dr. - Income Statement

  Cr. - Disposal

• Dr. - Income Statement

  Cr. - Non- current asset

A machine cost $25 000. It was decided to depreciate using a straight line method at the rate of 20%. Calculate the total depreciation for two years.

• $4000

• $5000

• $9000

• $10000

• $450 accrued

• $450 prepaid

• $1150 accrued

• $1150 prepaid

The term outstanding means ______

• payment

• prepaid

• owing

• prepayment

In 2005 a business paid $3000 for electricity.

On 1 January 2005, $600 was owed for electricity.

On 31 December 2005 $1300 was owed for electricity.

How much is charged for electricity in the income statement for 2005?

• $3000

• $3600

• $3700

• $4300

When selling price is greater than net book value, it is said to have a _______

• balance of profit

• booked profit

• loss on sale

• gain on sale

A loss on sale of non current asset is ________ to the income statement

• debited

• credited

• posted

• brought down

A vehicle costs $8500. It was depreciated using reducing balance method at the rate of 10%. It was sold for $2500. Calculate the Net book value of the vehicle after 2 years.

• $7650

• $6885

• $4385

• $5150

State the formula of finding Net Book Value.