Calculate gain or loss on sales of the plant

Assignment Help Accounting Basics

Reference no: EM133415830

Question: On 1 July 2022 David Ltd acquired a 100 per cent interest in Sandy Ltd

On 1 July 2022 David Ltd sells an item of plant to Sandy Ltd for $880 000

This plant cost David Ltd $1 million, is four years old and has accumulated depreciation of $400 000 at the date of the sale

The remaining useful life of the plant is assessed as six years

The tax rate is 30 per cent

Required:

Calculate Gain or Loss on sales of the plant and prepare the journal entry.

Reference no: EM133415830

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