Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › PROFIT OR LOSS ON DISPOSAL
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John Moffat.
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- December 13, 2025 at 3:40 pm #723947
Hello proffesor,
I have one issue with this Question. I got an answer C) $104 loss. i calculated:
5000-500= 4500
Y1: 4500 *0,2= 900 CA , DEP 3600
Y2: 3600 *0,2 = 720 , 2880 DEP
Y3: 2880 *0,2= 576, DEP 23042304-2200= 104 loss
Is mine correct or? bc i answers they did not calculate with residual value, so i am confused, how should i calculate this and on the exam
question: A non-current asset was disposed of for $2,200 during the last accounting year. It had been purchased exactly three years earlier for $5,000, with a residual value of $500, and had been depreciated on the reducing balance basis, at 20% per annum.
What was the profit or loss on disposal?
A. $360 loss
B. $150 loss
C. $104 loss
D. $200 profitDecember 13, 2025 at 9:34 pm #723948When using the reducing balance method, the residual value is not relevant.
So the depreciation in the first year is 1,000 (I do not know why you write ‘CA’) and the written down value is 4,000 (I do not know why have you written ‘DEP”).
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