On 1 January 2021, Hope Ltd decided to trade in equipment that had been acquired...
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Accounting
On 1 January 2021, Hope Ltd decided to trade in equipment that had been acquired by the company at a cost of $55,000 on 1 July 2018. The equipment had been estimated to have a useful life of 5 years (no residual value). The new equipment had a cost of $70,000. Hope Ltd was given a trade-in allowance of $30,000 and paid the balance in cash.
On 1 January 2021, in relation to the trade in of the old equipment, Hope Ltd should recognise in the profit and loss statement a:
Select one:
a.
Gain on trade in of $2,500
b.
Gain on trade in of $8,000
c.
Loss on trade in of $2,500
d.
Gain on trade in of $40,000
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