On 31 December 2019 a machine with a cost of $150 000 has accumulated depreciation written off of $90 000. If the machine was sold for $80 000 on 1 January 2020 how much will be recognised to the account "Carrying amount on the disposal of machinery"?

Question

Quizplus · Accepted Answer

The carrying amount on the disposal of machinery can be calculated as follows:

Carrying amount = Cost of machine - Accumulated depreciation written off 
Carrying amount = $150,000 - $90,000 
Carrying amount = $60,000

Since the machine was sold for $80,000, the difference between the sale price and the carrying amount will result in a gain or loss on disposal. Therefore, the amount recognized in the account "Carrying amount on the disposal of machinery" will be the carrying amount of $60,000.

On 31 December 2019 a Machine with a Cost of $150