Jack owns a construction business and on 1 December 2019 purchased an excavator for $58,000 which has an effective life of 10 years.

To help fund the purchase of the excavator Jack traded his old one for $11,000. The old excavator had cost Jack $46,000 originally and had an adjustable value at the time of trade-in of $9,200.

Assuming Jack is not using the Small Business Entity (SBE) depreciation method of depreciation, what would be the balancing adjustment on disposal of the old excavator?

$9,200 assessable

$1,800 deductible

$11,000 assessable

$1,800 assessable

$9,200 deductible