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On 1 July 2019, Pam acquired plant at a cost of $550,000. Estimated residual value is $50,000 and the expected useful life is 10 years.
On 1 July 2019, Pam acquired plant at a cost of $550,000. Estimated residual value is $50,000 and the expected useful life is 10 years. Straight line depreciation is used. After four years of use the plant was sold on 1 July 2023 for $290,000 cash plus GST.
Required:
- Calculate the accumulated depreciation (depreciation journals NOT required). (0.5 mark)
- Prepare the journal entries to record the disposal of the plant including the GST account. (2 marks)
- Calculate the gain or loss on disposal of the plant. (0.5 mark)
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