Answer to Question #103245 in Accounting for Phumudzo

Question

Which one of the following alternatives represents the correct amount of accumulated depreciation on office equipment which was sold on 30 september 2019?

Answer 1

The seller must accrue depreciation for September, and the buyer will already accrue for October. Accrued depreciation amount = Initial amount of fixed asset value minus residual value of fixed asset. Typically, the useful life of office equipment is 1 year.Therefore, in this case, accumulated depreciation will include September 2019.

When a fixed asset is sold, accumulated depreciation, residual value and initial cost are written off.