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 | 90,000 |
Profit on sale of non-currnet assets | 105,000 |
Statement of financial position
X2 | X1 | |
$ | $ | |
Plant and machinery - Cost | 620,000 | 600,000 |
Plant and machinery - depreciation | 372,500 | 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 | 620,000 | |
Cost of Disposal | 70,000 |
Plant & Machinery Depreciation | Debit | Credit |
Opening Balance | 300,000 | |
ADD Addition during the year | 90,000 | |
MINUS Closing Balance | 372,500 | |
Depreciation of Disposal | 17,500 |
Working:
profit + cost of disposal - depreciation of disposal
105,000 + 70,000 - 17,500
= 157,500
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