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Whelan Ltd which makes up accounts to 31 December every year charges depreciation on vehicles on a reducing balance basis at a rate of 25%. In the year of acquisition and disposal of assets, depreciation is computed on a strict time basis. On 1 June X6 the business sold a truck for £20,000. It was purchased on 1 April X4 for £40,000. Compute the profit or loss arising on the sale and prepare the asset disposal T account.

Whelan Ltd which makes up accounts to 31 December every year charges depreciation on vehicles on a reducing balance basis at a rate of 25%. In the year of acquisition and disposal of assets, depreciation is computed on a strict time basis. On 1 June X6 the business sold a truck for £20,000. It was purchased on 1 April X4 for £40,000. Compute the profit or loss arising on the sale and prepare the asset disposal T account.

FINANCIAL ACCOUNTING
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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Whelan Ltd which makes up accounts to 31 December every year charges depreciation on vehicles on a reducing balance basis at a rate of 25%. In the year of acquisition and disposal of assets, depreciation is computed on a strict time basis. On 1 June X6 the business sold a truck for £20,000. It was purchased on 1 April X4 for £40,000. Compute the profit or loss arising on the sale and prepare the asset disposal T account.
Transcribed Image Text:Whelan Ltd which makes up accounts to 31 December every year charges depreciation on vehicles on a reducing balance basis at a rate of 25%. In the year of acquisition and disposal of assets, depreciation is computed on a strict time basis. On 1 June X6 the business sold a truck for £20,000. It was purchased on 1 April X4 for £40,000. Compute the profit or loss arising on the sale and prepare the asset disposal T account.
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