First Point Ltd acquired an item of machinery on 1 July 2019 for a cost of $250 000. When the asset was acquired, it was considered to have a useful life for the entity of six years. After this time, the machine will have no residual value. It is believed that the pattern of economic benefits would best be reflected by applying the sum-of-digits method of depreciation. However, contrary to expectations, on 1 July 2022 the asset was sold for $110 000. The amount is to be received as follows: $60 000 on 30 June 2023 and $50 000 on 30 June 2024. The applicable interest rate is 6 per cent.

REQUIRED

Calculate the profit on disposal of the asset and provide the appropriate journal entries in the books of First Point Ltd to record the disposal and the subsequent receipts of cash.