An item of plant and equipment cost £15,000 at the start of Year 3. Its estimated residual value is £3,000 and it has an estimated useful life of 4 years. It is sold at the end of Year 4 for £7,000. A full year's depreciation is charged in the year of acquisition and in the year of disposal. Which of the following is correct? a) The depreciation on a straight-line basis is £3,750 per annum; the loss on disposal at the end of Year 4 is £500 Ob) The depreciation on a straight-line basis is £3,750 per annum; the gain on disposal at the end of Year 4 is £500 O c) The depreciation on a straight-line basis is £3,000 per annum; the loss on disposal at the end of Year 4 is £2,000 O d) The depreciation on a straight-line basis is £3,000 per annum; the gain on disposal at the end of Year 4 is £2,000

An item of plant and equipment cost £15,000 at the start of Year 3. Its estimated residual value is £3,000 and it has an estimated useful life of 4 years. It is sold at the end of Year 4 for £7,000. A full year's depreciation is charged in the year of acquisition and in the year of disposal. Which of the following is correct? a) The depreciation on a straight-line basis is £3,750 per annum; the loss on disposal at the end of Year 4 is £500 Ob) The depreciation on a straight-line basis is £3,750 per annum; the gain on disposal at the end of Year 4 is £500 O c) The depreciation on a straight-line basis is £3,000 per annum; the loss on disposal at the end of Year 4 is £2,000 O d) The depreciation on a straight-line basis is £3,000 per annum; the gain on disposal at the end of Year 4 is £2,000

Name: An item of plant and equipment cost £15,000 at the start of Year 3. I
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Description: An item of plant and equipment cost £15,000 at the start of Year 3. Itsestimated residual value is £3,000 and it has an estimated useful life of 4years. It is sold at the end of Year 4 for £7,000. A full year's depreciation ischarged in the year of

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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