Accounting 0452 · IGCSE · Accounting for depreciation and disposal of non-current assets

Accounting for depreciation and disposal of non-current assets — practice question

Ravi’s financial year finishes on 30 April. On 1 May 2020, Ravi purchased a motor vehicle for $8000 and then sold it on 1 May 2022 for $4050. He applies the reducing balance method of depreciation at $20\% per annum. What amount would be shown in the income statement for the year ended 30 April 2023 in relation to the disposal of the motor vehicle?

  • A$750$ loss
  • B$750$ profit
  • C$1070$ loss
  • D$1070$ profit

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