PRC-1 · Chapter 6 · Question 20 of 100
A business disposes of a vehicle for Rs. 150,000 cash. The original cost of the vehicle was Rs. 400,000, and its accumulated depreciation at the date of disposal was Rs. 280,000. What is the gain or loss on disposal?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 30,000 Gain
Explanation
Carrying amount = Cost (400,000) - Accumulated Depreciation (280,000) = 120,000. Proceeds = 150,000. Gain = Proceeds (150,000) - Carrying amount (120,000) = Rs. 30,000 Gain.
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