Profit/loss on vehicle disposal via straight-line depreciation Steps:

• Annual depreciation = 20% × $23,500 =$4,700.
• Depreciation years: full in purchase (2017) + full years 2018, 2019 + full in disposal (2020) = 4 years.
• Accumulated depreciation = 4 × $4,700 =$18,800.
• NBV at disposal = $23,500 -$18,800 = $4,700.
• Loss on disposal = $3,500 proceeds -$4,700 NBV = $1,200 loss (note: proceeds likely$3,500 per option match).

Why A is correct:

• Straight-line method with full-year policy over 4 years yields NBV $4,700;$3,500 - $4,700 =$1,200 loss per disposal formula (proceeds - NBV).

Why the others are wrong:

• B: Assumes minor NBV miscalculation (e.g., $5,200), ignoring exact 4-year total.
• C: Reverses loss to profit, confusing NBV with proceeds.
• D: Uses 3-year depreciation ($14,100 total), NBV$9,400, loss $4,400 (too high) or partial adjustment error.

Final answer: A