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A car was purchased by T for $12,000 on 1 April 20X1 and has been depreciated at 20% each year straight line, assuming no residual value.
The accounting policy is to charge a full year’s depreciation in the year of purchase and no depreciation in the year of sale. The car was traded in for a replacement vehicle on 1 August 20X4 for an agreed trade-in value of $5,000.
What was the profit or loss on the disposal of the vehicle for the year ended 31 December 20X4?A car was purchased by T for $12,000 on 1 April 20X1 and has been depreciated at 20% each year straight line, assuming no residual value.
The accounting policy is to charge a full year’s depreciation in the year of purchase and no depreciation in the year of sale. The car was traded in for a replacement vehicle on 1 August 20X4 for an agreed trade-in value of $5,000.
What was the profit or loss on the disposal of the vehicle for the year ended 31 December 20X4?