In the financial year ended 31 December 2009, Sister Edith sold a car for $15,000. The car had been bought on 2 January 2006 for $45,000. Sister Edith depreciates motor vehicles on the reducing balance basis at a rate of 20% per annum. She charges a full year's depreciation in the year an asset is bought, and no depreciation in the year it is sold. What is the profit or loss on disposal of the car?
In the financial year ended 31 December 2009, Sister Edith sold a car for $15,000. The car had been bought on 2 January 2006 for $45,000. Sister Edith depreciates motor vehicles on the reducing balance basis at a rate of 20% per annum. She charges a full year's depreciation in the year an asset is bought, and no depreciation in the year it is sold. What is the profit or loss on disposal of the car?
Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges
Section: Chapter Questions
Problem 56P
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![In the financial year ended 31 December 2009, Sister Edith sold a car for $15,000. The car had
been bought on 2 January 2006 for $45,000. Sister Edith depreciates motor vehicles on the
reducing balance basis at a rate of 20% per annum. She charges a full year's depreciation in the
year an asset is bought, and no depreciation in the year it is sold. What is the profit or loss on
disposal of the car?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff49d0cfc-2ac0-430c-9cc7-2f78bb502dab%2Fd5e64f65-854e-4737-ad29-c28f524caa26%2Fn36gvkm_processed.png&w=3840&q=75)
Transcribed Image Text:In the financial year ended 31 December 2009, Sister Edith sold a car for $15,000. The car had
been bought on 2 January 2006 for $45,000. Sister Edith depreciates motor vehicles on the
reducing balance basis at a rate of 20% per annum. She charges a full year's depreciation in the
year an asset is bought, and no depreciation in the year it is sold. What is the profit or loss on
disposal of the car?
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