A motor van originally cost $\$ 11500$ and had been depreciated by $\$ 9000$. The van was sold for $\$ 2750$. How should the profit or loss on the sale of the van be shown in the disposal account?

Explanation

The profit or loss on the sale of the van is calculated as the difference between the sale price and the carrying value of the van. The carrying value is the original cost minus the accumulated depreciation. In this case, the carrying value is $11500 - $9000 = $2500. The profit is $2750 - $2500 = $250, which should be shown as a credit in the disposal account.

A motor van originally cost $\$ 11500$ and had been depreciated by $\$ 9000$. The van was sold for $\$ 2750$. How should the profit or loss on the sale of the van be shown in the disposal account?

Explanation

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