Accounting 9706 · AS & A Level · Accounting for non-current assets

Accounting for non-current assets — practice question

On 1 January 2012, a business bought a motor vehicle for $24000. Its expected useful life was four years, and its estimated residual value after four years was $8000. The business charges depreciation on motor vehicles at 25% per annum by the reducing balance method. No depreciation is charged during the year of disposal. The motor vehicle was sold on 31 July 2015 for $12000. What was the profit made on the sale of the motor vehicle?

  • A$1875
  • B$4000
  • C$5250
  • D$8000

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