Trail Balance at 31 March year 2:

Property at cost 200,000
Plant and equipment at cost 154,000
Depreciation 1 april year 1 plant and equipment (34,800)

Notes:

On 1 April year 1 the company acquired a new property at cost 200,000. for the purpose of calculating depreciation only, the asset has been separated into the following elements:
1. Land 50,000/ freehold
2. heating system 20,000/10years
3. lifts 30,000/15years
4. building 100,000/50years

the depreciation of the elements of the building should be calculated on a straight - line basis. The new property replaced an existing building that was sold on the same date for 95,000. It had cost 50,000 and had carrying value of 80,000 at the date of sale. The profit on this property has been calculated on the original cost. It had not been depreciated on the basis that the depreciation charge would not be material.

Required:

Income Statement at 31 March year 2.
Revenue….

I will appreciate any help. I get confused.
Thanks

I assume this is part of a question?

If so they probably have some kind of profit on sale of building entry that you need to correct using the carrying value.

Yes, there is a profit on sale of the amount $45,000. What i need to correct? Actually, i don’t understand how the carrying amount is working. If they sell the property in the 1 year and the trial balance presented have details for the second year. it is not included that carrying value in the amount of 200,000? Or my understand is wrong.

Or i will have the next answer:

200,000 -80,000= 120,000 Property at cost then
Depreciation 120,000x50%x12/12= 2,400 per year