What is the actual profit or loss arising from the vehicle disposed of?

Motor Vehicle Account as at 31st December 2001.
Debit:
Jan. 1, cost …………….N1950 000
Dec.31, Addition ………… N400 000
Credit:
Jan. 1, Depreciation ……..N1360 000
June 30, Sales proceeds…… N700 000
The vehicle sold was purchase on January 1, 1998 at a cost of N1,000 000 and had depreciation at 25% on cost.

A. N250 000 loss
B. N50 000 loss
C. N450 000 profit
D. N575 000 profit

Correct Answer:

Option C – N450 000 profit