A-LevelAccountingAccounting for non-current assets9706/12 · Oct/Nov 2022 · Q31 Mark
A company purchased a new vehicle for $30000. It part-exchanged an existing vehicle at a value of $6500, with the balance being paid by cheque. The part-exchanged vehicle originally cost $12000 and had a net book value of $4800 on disposal. Which entries will be made in the accounts?
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Aincome statement: $1700 income; bank account: motor vehicle at cost $23500 credit
Bincome statement: $1700 expense; bank account: motor vehicle at cost $30000 debit
Cincome statement: $5500 expense; bank account: motor vehicle at cost $23500 debit
Dincome statement: $5500 income; bank account: motor vehicle at cost $30000 credit
✓ Correct answer
A: income statement: $1700 income; bank account: motor vehicle at cost $23500 credit
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