A company purchased an asset on 1 January 2013 at a cost of K1, 000,000. It is depreciated over 50 years by the straight line method (nil residual value), with a proportionate charge for depreciation in the year of acquisition and the year of disposal. At 31 December 2014 the asset was re-valued to K1, 200, 000. There was no change in the expected useful life of the asset.

The asset was sold on 30 June 2015 for K1, 195, 000.

What profit or loss on disposal of the asset will be reported in the income statement of the company for the year ended 31 December 2015?

Answer rating: 100% (QA)

Original cost 1 Jan 2013 1000000 Life 50 yrs Depreciation per year ... View the full answer