plz solve this question asap!

[kamranACA]

Q1A car was purchased for $12000 on 1 april 1997 and has been depreciated at 20% each year straight line,assuming no residual value.the company policy is to charge full year’s depreciation in the year of purchase and no depreciation in the year of sale.the car was traded in for a replacement vehicle on 1 august 2000 for an agreed figure of $5000.
What was the profit or loss on the disposal of the vehicle for the year ended 31 december 2000?

SUGGESTED ANSWER

Straight line method is to be used. I assume that accounting year starts from january and ends in december. This way depreciation will be charged for 1997, 1998 and 1999. No depreciation will be charged for 2000 as it is the deletion year where no depreciation has to be charged as per company's policy.

Three years depreciation comes to 7,200$ (@2400$ per year).

Written down value as per record would be = 12000$ - 7200$ = 4800$

The car was finally sold during year 2000 at 5,000$.

Gain on disposal would be = Sale value at disposal - written down value at disposal
= 5,000$ - 4800$
= 200$

Note

-There is no information about the fair value of vehicle traded against this car.
-IAS 16 does not allow charging full year's depreciation in the year of addition and nil depreciation in the year of deletion.