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

Accounting for non-current assets — practice question

The business purchased new factory machinery for $120\,000$. This figure was entered under non-current assets, and depreciation of $10\%$ of cost was charged in the draft statement of profit or loss for the period. Moreover, the business paid $14\,000$ to install the machinery and $6000$ to insure it. These amounts were treated as revenue expenditure for the period. The draft statement of profit or loss for the period reported a profit of $50\,000$. What is the revised profit for the period?

  • A$48\,600$
  • B$50\,000$
  • C$62\,600$
  • D$68\,000$

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