A company purchased a machine on 1 April 2021 for ＄25 000. It was depreciated at 20% per annum using the straight-line method. A full year’s depreciation is charged in the year of purchase but none in the year of sale. On 30 June 2023 the machine was sold for ＄12 500.
The company’s year end is 31 December.
What was the profit or loss on the disposal of the machine?
1 )
＄1250 loss
2 )
＄1250 profit
＄2500 loss
4 )
＄2500 profit
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