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On 1 January 2022, Lauras business traded in one of its old machines (Machine A)...

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Accounting

On 1 January 2022, Lauras business traded in one of its old machines (Machine A) in exchange for a newer model (Machine B). Machine A had originally been purchased on 1 January 2015 for 27,000.

It had been depreciated at a rate of 10% per year straight line.

The vendors normal list price for Machine B was 44,000, but Laura only paid 35,000 cash plus the trade-in of Machine A in full settlement.

What was the profit or loss on the disposal of Machine A? (Make sure you also state whether your figure is a profit or a loss)

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