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

Accounting for non-current assets — practice question

A company had the following spending on a motor van. Year 1: buying the motor van, $\$80\,000$ Year 2: buying new tyres, $\$2\,000$ Year 2: buying a trailer to be attached to the motor van, $\$10\,000$ Depreciation for all vehicles is $20\%$ on cost. In the year of purchase, a full year’s depreciation is charged. How much depreciation was charged on vehicles in year 2?

  • A$\$16\,000$
  • B$\$16\,400$
  • C$\$18\,000$
  • D$\$18\,400$

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