Chapter 10, Problem 5QC

To determine

Gain / Loss on disposal of an Asset:

Whenever any asset is disposed or sold either gain or loss has to be accounted in the books of accounts to close the accounts of asset and accumulated depreciation accounts.

There can be two cases of disposal.

• When asset is fully depreciated

• When asset is not completely depreciated.

In the second case the balance remaining non depreciated amount of the asset has to be written off to Profit & Loss account as Loss on disposal of asset when nothing is received against asset disposal.

To determine: Gain / Loss on disposal of asset