Depreciation and disposal

The cost of the car was $20,000 and so the depreciation will have been $2,000 per year for each of the years to 31 December X5, X6, X7, X8, X9, Y0 and Y1. So a total of 7 years giving accumulated depreciation of $14,000 and therefore a written down value of $6,000. It was exchanged for a new car for which they paid $15,000 and an allowance of $7,000 for the old car. That means that the cost of the new car was $22,000 and they were effectively getting $7,000 for the old car. So the profit on sale of the old car was $7,000 - $6,000 = profit of $1,000. Have you watched my free lectures on this?