Adam's financial year ends on 31 December 2017.
On 1 January 2017 the net book value of machinery was $20000.
On 30 June 2017 he purchased a new machine for $6000. He paid 50% of the cost in cash and the balance by part exchange of an old machine, which had a net book value of $2500 on that date.
He depreciates his machinery by 20% per annum on the net book value calculated on a time basis.
What is the net book value of the machinery shown in the statement of financial position on 31 December 2017?

Q: What topic does this question test?

This question tests Depreciation and Disposal of Non-Current Assets in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting May/June 2018 examination, Paper 1 Variant 2 (9706_s18_qp_12.pdf).

Question

Adam's financial year ends on 31 December 2017.
On 1 January 2017 the net book value of machinery was $20000.
On 30 June 2017 he purchased a new machine for $6000. He paid 50% of the cost in cash and the balance by part exchange of an old machine, which had a net book value of $2500 on that date.
He depreciates his machinery by 20% per annum on the net book value calculated on a time basis.
What is the net book value of the machinery shown in the statement of financial position on 31 December 2017?

Oracle Prep · Accepted Answer

The correct answer is C: $19 150.

✓ Correct Answer

📋 Examiner Report & Trap Analysis

🎯 Mark Scheme Breakdown

Unlock the Examiner's Analysis

About This A-Level Accounting Question

Topic

Source

Practice on Oracle Prep

Related Accounting Questions