MCQ O-Level Principle of account for Nov 06

[dasani]

The financial year of YEUNG ends on 30 June. On 1 July 2005 he purchased a machine for $4000.
He estimated that it would have a useful working life of 3 years and a residual value of $100.
Yeung uses the straight line method of depreciation.

The machine wassold on 1 July 2006 $1500.

What was the loss on disposal?

 

[aaakhtar19]

total dep. =(4000-100)/3
total dep. =1300

Valu after 1 year=4000-1300
=2700
Sold for =1500
loss =2700-1500
=1200.....................................

 

[dasani]

thanks a lot