Assume that a machine with a cost of $3000 has accumulated depreciation of $1400 on the date of its disposal.If it was traded-in for $2000 on a new machine and the balance of $1500 was paid in cash what is the profit or loss on disposal of the old machine? Ignore GST.

Question

Quizplus · Accepted Answer

The book value of the old machine is $1600 ($3000 cost - $1400 accumulated depreciation). It was traded in for $2000, resulting in a gain of $400 ($2000 trade-in value - $1600 book value).

Assume That a Machine with a Cost of $3000 Has