Gavin Sold an Item of Machinery on 31 October 20X4

Multiple Choice

Gavin sold an item of machinery on 31 October 20X4 for £6750.He had bought the machine exactly five years previously for £15 500 and had decided to depreciate it at the rate of 15% each year on the reducing balance basis. What was Gavin's profit or loss on disposal of the machine (to the nearest £) ?

A) Loss of £2875
B) Loss of £127
C) Profit of £127
D) Profit of £2875