Day: February 20, 2023

On 1 October 2014 a company purchased machinery for £26,000.

It was decided to depreciate the asset using the reducing balance method at a rate of 20 % per annum.

On 30 September 2016 the asset was sold for £12,000.

What is the profit or loss on disposal?

Select ONE answer:

1. £3,600 loss
2. £3,600 profit
3. £4,640 loss
4. £4,640 profit

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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