Harbin Ltd. has a 31 December year end. A motor vehicle was acquired in July 2019 for  £20,000. Depreciation is charged at 25% reducing balance basis, with a full year’s charge in  year of purchase and none in year of sale. The vehicle was sold for £10,000 in July 2021.  What is the profit or loss on disposal?  a) Loss £850 b) Profit £1,250 c) nil profit or loss d) Loss £1,250

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A: When asset is sold the gain /loss will be recognized

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A:

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A: DEPRECIATION UNDER DOUBLE DECLINING METHOD Rate =100%5 =20% Double declining rate = 20×2=40%

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Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.