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

Accounting for non-current assets — practice question

A business’s accounting year finishes on 31 December. In September 2013, it bought a machine for $20000. The machine was then sold on 30 November 2016 for $7500. The company depreciated machinery by $15\%$ with the straight-line method. It recorded a full year’s depreciation in the year of purchase and no depreciation in the year of sale. What is the profit or loss on disposal?

  • A$2750$ loss
  • B$2750$ profit
  • C$3500$ loss
  • D$3500$ profit

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