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CIMAPRA17-BA3-1 Exam - Topic 1 Question 125 Discussion

Refer to the Exhibit.Your organization bought a machine for 50,000 at the beginning of year 1, which had an expected useful life of four years and an expected residual value of 10,000; the machine was depreciated on the straight-line basis.At the beginning of year 4, the machine was sold for 13,000The total amount of depreciation charged to the income statement over the life of the machine, and the amount of profit or loss on disposal was:The answer is:
A) Option A
B) Option B
C) Option C
D) Option D

CIMAPRA17-BA3-1 Exam - Topic 1 Question 125 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam
Question #: 125
Topic #: 1
[All CIMAPRA17-BA3-1 Questions]

Refer to the Exhibit.

Your organization bought a machine for 50,000 at the beginning of year 1, which had an expected useful life of four years and an expected residual value of 10,000; the machine was depreciated on the straight-line basis.

At the beginning of year 4, the machine was sold for 13,000

The total amount of depreciation charged to the income statement over the life of the machine, and the amount of profit or loss on disposal was:

The answer is:

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Suggested Answer: A

by Tina at May 08, 2026, 03:07 AM

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Jesusa
10 hours ago
Wait, how does selling for 13,000 affect profit?
upvoted 0 times
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Monroe
6 days ago
Totally agree, straight-line makes it simple!
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Malcolm
11 days ago
Depreciation over 4 years is 10,000 per year.
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Helaine
16 days ago
I believe the total depreciation over four years would be 10,000 each year, but I’m not confident about the final profit calculation after the sale.
upvoted 0 times
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Detra
2 months ago
I’m a bit lost on how to determine the profit or loss on disposal. Did we consider the accumulated depreciation correctly?
upvoted 0 times
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Willodean
2 months ago
I remember a similar question where we had to calculate depreciation and then find the profit on sale. I think we need to subtract the book value from the sale price.
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Cory
2 months ago
I think the total depreciation should be calculated by taking the cost minus the residual value and dividing by the useful life, but I'm not entirely sure about the numbers.
upvoted 0 times
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