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The Nan-Chuma Cellar (a restaurants company) is planning the disposal of one of its restaurants as a going concern. At the financial year end (31 December 20X9), the company expects to sell the group of assets within one year. It has a firm plan agreed by the Directors for the disposal of the restaurant, all equipment and furnishings, along with the associated mortgage on the property.
Question 1: Explain how the above transaction should be reflected in the Nan-Chuma Cellar's financial statements for the year ending 31 December 20X9 assuming the proposed sale goes ahead as planned.
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