Accounting 9706 · AS & A Level · Accounting for non-current assets

Accounting for non-current assets — practice question

A business writes off its motor vehicles at 20% per annum by means of the straight-line method, with depreciation being applied month by month. On 30 June in the current financial year, a new van was bought for $20000. An old van that had cost $18000 and had been purchased at the start of the previous year on 1 January was taken in part exchange for $14000. The remaining amount was settled by cheque. What is the total fall in profit for the current financial year ended 31 December caused by this?

  • A$2400
  • B$3400
  • C$3800
  • D$5200

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