Pat Replaces Motor Vehicles Used in His Business Every Four

Multiple Choice

Pat replaces motor vehicles used in his business every four years.On 1 May 20X6 he bought a new vehicle for £16 200 to replace a four-year old car that was sold on the same day for £3600.The latter vehicle was purchased for £12 300 and was depreciated on the straight-line basis assuming a residual value of £4500. What was Pat's profit or loss on sale of the vehicle?

A) Profit of £900
B) Loss of £900
C) Profit of £3600
D) Loss of £300