Reference no: EM132452882

Problem 1 - On 1 January 2011, Y Ltd purchased a new machine for $500 000. The estimated scrap value of the machine is $20 000. The machine is depreciated straight -line over its useful life of 6 years. On 31 December 2012, Y Ltd sold the machine for $400 000 to a director of the company. The gain or loss on sale is:

a. Gain on sale $60,000

b. Loss on sale $100,000

c. Loss on sale $80,000

d. There is no gain or loss

Problem 2 - The following data relates to a company with a single product:

Selling price per unit $200

Variable costs per unit $140

Fixed costs $130 000

The number of units to produce a profit before tax of $50 000 is?

a. 3 000

b. 2 167

c. 900

d. 833