Malvolio Ltd traded its delivery van in for a new van on the 31st December 2016. The old van was purchased during the year ended the 31st December 2011 for 28,000, and has been depreciated using 15% straight line (a full year depreciation is charged in the year of purchase, none in the year of sale).

The purchase price of the new van is 35,000 but Malvolio Ltd only needed to pay 27,000 following the trade in.

The gain or loss on disposal of the old van is:

8,000 gain

1,000 gain

1,000 loss

8,000 loss