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

Accounting for non-current assets — practice question

A business’s financial year ends on 31 December. On 1 January 2014, it bought a non-current asset for $100\,000$. The asset was depreciated by the reducing balance method at $20\%$ per annum. It was sold for $40\,000$ on 1 January 2016. Calculate the loss on disposal.

  • A$20\,000$
  • B$24\,000$
  • C$40\,000$
  • D$60\,000$

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