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Problem - Company Ltd purchased a vehicle in 201 i" for €42,000. The vehicle had an estimated useful life of 5 years and an expected residual value of €2,000. Depreciation is charged in full in the year of purchase and none in the year of sale. The vehicle was involved in a traf?c accident on the 13'of July 2020 and had to be written off. Company Ltd claimed €13,500 on an insurance policy and this was paid in December 2020. What was the pro?t or loss on this disposal?
Financial Statement Analysis and Preparation
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