Assume That a Machine with a Cost of $90 000

question 1

Multiple Choice

Assume that a machine with a cost of $90 000 has accumulated depreciation of $48 000 on the date of its disposal. What is the profit or loss on disposal of the old machine if it was traded-in for $40 000 on a new machine? (Ignore GST.)

• A) $40 000 loss
• B) $2 000 loss
• C) $8 000 gain
• D) $42 000 loss

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