A-LevelAccountingAccounting for non-current assets9706/12 · Feb/Mar 2025 · Q71 Mark
A business depreciates its motor vehicles at 20% per annum using the straight-line method. Depreciation is charged on a month-by-month basis. On 30 June in the current financial year, a new van was purchased at a cost of $20000. An old van which cost $18000, bought at the beginning of the previous year on 1 January, was part exchanged for $14000. The balance was paid by cheque. What is the total reduction in profit for the current financial year ended 31 December as a result of this?
A$2400
B$3400
C$3800
D$5200
✓ Correct answer
A: $2400
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