FINAL ADJUSTMENTS: DISPOSALS OF PROPERTY, PLANT OR EQUIPMENT

MECHANICS • RECORD THE SALE PROCEEDS IN THE BANK ACCOUNT: DR BANK; CR DISPOSALS A/C • TRANSFER THE COST OF THE ASSET SOLD TO THE DISPOSALS ACCOUNT   • TRANSFER THE DEPRECIATION PROVISION ON THE ASSET TO THE DISPOSALS ACCOUNT   • THE BALANCE ON THE DISPOSALS ACCOUNT IS THE PROFIT/LOSS ON SALE → INCOME STATEMENT 

DEPRECIATION CHARGE  NBV OF PLANT FOLLOWING SALE: COST [250-110]                                   140,000  DEPRECIATION  PROVISION [120-20] (100,000)                                                              40,000    @ 15% 6,000 

DISCLOSURE • INCOME STATEMENT   COST OF SALES [NB. PLANT]   DEPRECIATION                               6,000  LOSS ON SALE OF PLANT             10,000 • BALANCE SHEET   NON-CURRENT ASSETS   PLANT & EQUIPMENT                   34,000 [40 – 6]   

NOTES TO THE ACCOUNTS: PLANT &  EQUIPMENT COST  AT 1.7.10                                     250,000  DISPOSALS                                (110,000)  AT 30.6.11                                    140,000 DEPRECIATION PROVISION  AT 1.7.10                                      120,000  DISPOSALS                                  (20,000)  CHARGE                                         6,000  AT 30.6.11                                     106,000  NET BOOK VALUE                          34,000 

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