Accounting 9706 · AS & A Level · Accounting for non-current assets
Accounting for non-current assets — practice question
Clarissa opened the business on 1 July 2022, and she is now drawing up her financial statements for the year ended 30 June 2024. She writes off motor vehicles at 25% per annum by the straight-line method. Depreciation is calculated each month.
(a)[8]
Prepare both accounts for the year ended 30 June 2024.
(b(i))[1]
Calculate the remaining balance on the interest-free loan at 30 June 2024.
(b(ii))[1]
State how the interest-free loan should be presented in the statement of financial position at 30 June 2024.
(c)[5]
Advise Clarissa whether she ought to switch her depreciation method. Support your advice by comparing both methods.
Worked solution & mark scheme
This 15-mark question has a full step-by-step worked solution and mark scheme.