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

Accounting for non-current assets — practice question

Ryan bought a van for $\$16\,000$ on 31 December 2021. He uses a depreciation policy of $25\%$ per annum on the reducing balance basis, with depreciation charged for each part of the year that the asset is owned. On 1 July 2024, Ryan exchanged the van and received a $\$6\,150$ allowance towards the price of a new van. Calculate the profit or loss on disposal of the van.

  • A$\$600$ loss
  • B$\$1\,725$ loss
  • C$\$150$ profit
  • D$\$2\,150$ profit

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