On 31 December 2014 an aeroplane with a cost of $200 000 has had accumulated depreciation written off of $170 000. If it was sold for a profit of $30 000 on 1 January 2015 how much was recorded as income from the proceeds of the sale?

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Quizplus · Accepted Answer

The book value of the aeroplane on 31 December 2014 is $30,000 ($200,000 cost - $170,000 accumulated depreciation). If it was sold for a profit of $30,000, the sale price must have been $60,000 ($30,000 book value + $30,000 profit). Thus, $60,000 was recorded as income from the sale.

On 31 December 2014 an Aeroplane with a Cost of $200