Use the Information Below to Answer the Following Questions

Multiple Choice

Use the information below to answer the following questions.
Brown Ltd purchased a machine on the first day of the financial period, 1 July 2010, for $100,000. The machine was depreciated using the reducing balance method and a rate of 20%. It was sold on 1 July 2011.
-If the machine was sold for $60 000,what was the gain or loss on disposal?

A) loss of $20 000
B) loss of $40 000
C) gain of $60 000
D) gain of $20 000.