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

Accounting for non-current assets — practice question

On 1 January 2020, a business acquired a new machine for $15000, with $10000 paid by cheque. The shortfall was covered by part exchange of an old machine. The old machine had originally cost $12000 on 1 January 2018 and was estimated to last for 6 years, with a residual value of $2400. The business applies the straight-line method of depreciation. What was the loss on the disposal of the old machine?

  • A$1400
  • B$3000
  • C$3800
  • D$4600

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