A-LevelAccountingAccounting for non-current assets9706/12 · May/June 2016 · Q31 Mark
A business purchased a motor vehicle on 1 January 2012 for $24000. The estimated useful life of the motor vehicle was four years and the estimated residual value at the end of four years was $8000. The business depreciates motor vehicles at 25% per annum using the reducing balance method. No depreciation is charged in the year of disposal. The motor vehicle was sold on 31 July 2015 for $12000. What was the profit on the sale of the motor vehicle?
A$1875
B$4000
C$5250
D$8000
✓ Correct answer
A: $1875
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