A helping hand with point no.

3 Financial accounting class 5 (partnership question) disposal

of equipment only:From the question we know the following:Cost of equipment (which was disposed of )
Sale proceeds
Net book value (NBV)

250
220
200

From our studies, we know that:

Cost
250

Accumulated depreciation
?

=
=

NBV,
200

therefore :-

The missing figure from the calculation above is 50, which represents accumulated depreciation
Accounting steps disposals

1. Transfer original cost to disposal account

Dr Disposal account (with cost of asset)
Cr Equipment cost account
2. Transfer accumulated depreciation to disposal account
Dr Provision for depreciation account
Cr Disposal account (with accumulated depreciation)
3. Transfer sale proceeds (if any) to the disposal account
Dr Bank
Cr Disposal account (with sale proceeds)
IMPORTANT NOTE: In this question, the above double entry has been carried
out (read note 3).
We also know this because we have a balance of 220 on the suspense a/c
per the trial balance

4. Balance off the disposal account the difference will represent a profit/loss on
disposal

The entries for the disposal account only are as follows:-

Dr
step 1
Difference = GAIN

Disposal account
250
20
270

Step 2
Step 3

Cr

Per trial balance

50
220
270