Accounting 0452 · IGCSE · Accounting for depreciation and disposal of non-current assets

Accounting for depreciation and disposal of non-current assets — practice question

Zak has charged depreciation on his machinery at 20% per annum by using the straight-line method. At 31 December 2018, the statement of financial position showed: - machinery at cost: $30000 - depreciation to date: $12000 - net book value: $18000 On 31 December 2019, Zak was thinking about working out the annual depreciation at 20% per annum based on the net book value of the machinery. Which statement is correct?

  • Adepreciation would be $3600 applying the consistency principle
  • Bdepreciation would be $3600 applying the prudence principle
  • Cdepreciation would be $6000 applying the consistency principle
  • Ddepreciation would be $6000 applying the prudence principle

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