A company is preparing its sttement of cash flows for the year ended 31 December X2. Relevant extracts from the accounts are as follows.
Statement of comprehensive income
| Depreciation | 60,000 |
| Profit on sale of non-currnet assets | 15,000 |
Statement of financial position
| X2 | X1 | |
| $ | $ | |
| Plant and machinery - Cost | 670,000 | 600,000 |
| Plant and machinery - depreciation | 355,000 | 300,000 |
Plant and machinery additions during the year were $90,000. What is the cash flow arising from the sale of non-current assets?
Suggested solutions:
| Plant & Machinery Cost | Debit | Credit |
| Opening Balance | 600,000 | |
| ADD Addition during the year | 90,000 | |
| MINUS Closing Balance | 670,000 | |
| Cost of Disposal | 20,000 |
| Plant & Machinery Depreciation | Debit | Credit |
| Opening Balance | 300,000 | |
| ADD Addition during the year | 60,000 | |
| MINUS Closing Balance | 355,000 | |
| Depreciation of Disposal | 5,000 |
Working:
profit + cost of disposal - depreciation of disposal
15,000 + 20,000 - 5,000
= 30,000
To do the same topic again in ACCA F3 Sale of Non-Current Asset Cash Flow
To do another topic in ACCA F3
2015 ACCA F3 Sale of Non-Current CASH FLOW