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

Accounting for non-current assets — practice question

On 31 December 2021, a business recorded a non-current asset with a net book value of $18000. The asset had been bought in the year ending 31 December 2020. Depreciation is applied at $25\%$ per annum by the reducing balance method. In the year the asset is purchased, depreciation is charged for a full year. What was the asset’s original cost?

  • A$22500
  • B$24000
  • C$27000
  • D$32000

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