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

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

At the beginning of his financial year, Jason bought a new machine for $20\,000$. At that time, the book value of his old machine was $6000$. Jason received $4500$ for the old machine as part exchange. He settled the remaining amount by cheque. Machinery is depreciated by $20\%$ each year. What amount should be debited to Jason's income statement for the year?

  • A$1500
  • B$2500
  • C$4000
  • D$5500

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