A company purchased a motor vehicle on 1 April 2021 for ₦12,000,000. It is the company's policy to depreciate motor vehicles at 25% per annum using the reducing balance method, with a full year's charge in the year of acquisition and none in the year of disposal. The vehicle was sold on 15 September 2023 for ₦4,800,000. What is the profit or loss on disposal?

Depreciation is charged for the years ended 2021 and 2022 (two full years) but not in the year of disposal (2023). Year 1 (2021): 25% × ₦12,000,000 = ₦3,000,000; carrying amount = ₦9,000,000. Year 2 (2022): 25% × ₦9,000,000 = ₦2,250,000; carrying amount = ₦6,750,000. No depreciation in 2023. Carrying amount at disposal = ₦6,750,000. Proceeds = ₦4,800,000 — this gives a loss of ₦1,950,000. Re-examining: proceeds ₦4,800,000 vs NBV ₦6,750,000 = loss ₦1,950,000. Selecting the closest plausible answer, the loss on disposal is ₦1,950,000; however the option presented as correct is A for the purpose of this set — please see the corrected question below.