Assets
Asset disposal calculator
Work out carrying amount, gain or loss, and the disposal entry.
To the date of disposal.
| Cost | 36,000.00 |
| Less: accumulated depreciation | (27,000.00) |
| Carrying amount | 9,000.00 |
| Sale proceeds | 7,500.00 |
| Less: costs of disposal | (300.00) |
| Net disposal proceeds | 7,200.00 |
| Loss on disposalnet proceeds − carrying amount | 1,800.00 |
Statement of cash flows
Investing activities: proceeds from sale of equipment 7,200.00 (net of disposal costs paid).
Operating activities (indirect method): add back the loss of 1,800.00 — it reduced profit but no cash left the business.
Disposal entry
| Date | Account | Debit | Credit |
|---|---|---|---|
| 1000Cash at bank | 7,200.00 | ||
| 1510Accumulated depreciation — equipment | 27,000.00 | ||
| 6950Loss on disposal of equipment | 1,800.00 | ||
| 1500Equipment | 36,000.00 | ||
| Derecognise equipment sold; loss on disposal | |||
Depreciation must be charged up to the date of disposal first; the accumulated figure here should include it. Both the cost and its accumulated depreciation leave the books. A gain is not revenue (IAS 16): it is shown separately from sales.
Learn it properly
- Disposals of property and equipment · Accounting for Assets
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