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

Accounting for non-current assets — practice question

On 1 April 2017, a company bought a machine for $25000. It was depreciated by $20\%$ each year using the straight-line method. Depreciation for a complete year is recorded in the year of purchase, but no depreciation is recorded in the year of sale. The machine was sold on 30 June 2019 for $12500. The company's year-end is 31 December. What was the profit or loss on disposal of the machine?

  • A$1250 loss
  • B$1250 profit
  • C$2500 loss
  • D$2500 profit

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