The sale of an asset for disposal purposes is like a regular asset sale and a proper accounting treatment is required in the books of accounts.

“The sale of an asset for disposal purposes is like a regular asset sale and a proper accounting treatment is required in the books of accounts.”
a. Explain with example the capital nature and revenue nature expenses with reference to International Accounting Standard Property Plant and Equipment (lAS 1 6)?(4marks)
b. Jet Co. purchased a machine on 1 July 2017 at a cost of OMR5 1,000. The machine had an estimated salvage value of OMR3,000 and a life of eight years. The machine was sold for 0MR48,600 on 31 December 2019, the last day of the accounting year of the business. To make the sale, the business had to incur dismantling costs and costs of transporting the machine to the buyer’s premises. These amounted to OMR1,200. The business uses the straight-line method of depreciation. What was the gain or loss on disposal of the machine?
(A ns wers should show clear steps an l calculaijo,, s).(6 marks)

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