On 1 July 2019, Joe acquired plant at a cost of $700,000. Estimated residual value is $60,000 and the expected useful life is 8 years. Straight line depreciation is used. After five years of use the plant was sold on 1 July 2024 for $260,000 cash plus GST.

Required:

1. Calculate the accumulated depreciation (depreciation journals NOT required). (0.5 mark)

2. Prepare the journal entries to record the disposal of the plant including the GST account. (2 marks)

3. Calculate the gain or loss on disposal of the plant. (0.5 mark)