Prepare the disposal account recording the profit

Reference no: EM13259672

Kim owns a chinese restaurant. The business's fixed assets include some kitchen equipment which cost $38000 when it waspurchased on 1 jan 08.

It was decided that the kitchen equipment should bedepreciated using the straight line method. It was estimated that the equipment has a useful life of 5 years and a scrap valueof $2000. Depreciation is recored on 31 December each year.

On 28 March 2010, some of the kitchen equipment was sold forcash $520. The equipment had cost $4400 on 1 Jan 08; at date ofsale the equipment had a net book value of $2000.

Required: Prepare the disposal account recording the profit orloss on the sale of the kitchen equipment.

Reference no: EM13259672

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