Paper 3 · June 2019 · Statement of Cash Flows

Medals Limited sold vehicles that had originally cost $75 000 for $12 000. The accumulated depreciation on these vehicles at the date of sale was $58 000. What was the loss on disposal of the vehicles?

Model answer

$5000

Also accepted: 5000, $5 000, 5 000

Explanation

Net book value at disposal = cost - accumulated depreciation = $75 000 - $58 000 = $17 000. Loss on disposal = net book value - sale proceeds = $17 000 - $12 000 = $5 000.

Derived from ZIMSEC Accounting Paper 3, June 2019, Q2

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