Additional information T Limited prepares accounts to 30 June.
The following balances are available at 30 June 2017:
Plant and machinery at cost. $ 174 300
Provision for depreciation. $ 48 700
On 1 July 2017 the company disposed of a machine which had a net book value of $20000. The machine had been purchased on 1 July 2015.
On 1 October 2017 a new machine was purchased for $68 600 paid 8by cheque.
The company depreciates plant and machinery at 20% using the reducing balance method calculated on a month-by-month basis. No depreciation is charged in the year of disposal.
How to find the original cost of the asset disposed on 1 july 2017 ?
A well explained answer is really appreciated !!!
