Assume that a machine with a cost of $9000 has accumulated depreciation of $4800 on the date of its disposal. If it was traded-in for $4000 on a new machine and the balance of $2000 was paid in cash what is the profit or loss on disposal of the old machine? (Ignore GST.)
A) $2000 loss
B) $200 loss
C) $800 gain
D) $3800 loss

Question

Quizplus · Accepted Answer

The book value of the old machine is $9000 - $4800 = $4200. It was traded-in for $4000, resulting in a loss of $4200 - $4000 = $200.

Assume That a Machine with a Cost of $9000 Has