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

Accounting for non-current assets — practice question

A trader bought a motor vehicle for $36000 on 1 July 2016. The motor vehicle had an estimated useful life of five years and an estimated residual value of $6000. Depreciation is charged each month using the straight-line method. The motor vehicle was sold on 31 March 2018 for $22500. What was the profit or loss on disposal of the motor vehicle?

  • A$900 loss
  • B$900 profit
  • C$3000 loss
  • D$3000 profit

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