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Lorry Ltd has an old machine that originally cost $294000 has accumulated depreciation of $137200 on the date of its disposal. if it is traded in for $147000 on a new machine and the balance of $196000 was paid in cash, what is the profit or loss on disposal of the old machine?
A) $98 000 loss
b) $58 800 gain
c) $39 200 gain
d) $117 600 loss
e) none of the abovePlease help me
The profit or loss is the difference between the sale proceeds and the carrying value (net book value).
The carrying value is 294,000 – 137,200 = 156,800
The proceeds are 147,000 (the trade in amount that was given against the new machine).
So the answer is ‘none of the above’ (unless you have mistyped any part of the question or possible answers)
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