A non-current asset was purchased for £240000 at the beginning of Year 1, with an expected life of 7 years and a residual value of £50000. It was depreciated by 20% per annum using the reducing balance method.

A non-current asset was purchased for £240000 at the beginning of Year 1, with an expected life of 7 years and a residual value of £50000. It was depreciated by 20% per annum using the reducing balance method.

At the beginning of Year 4 it was sold for £100000.

The result of this was:
A . A loss on disposal of £2720
B . A loss on disposal of £22880
C . A profit on disposal of £50000
D . A profit on disposal of £58571

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Answer: B