A-LevelAccountingDepreciation and Disposal of Non-Current AssetsMay/June 2018Paper 1 Q21 Mark
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?
A$18400
B$18800
C$19 150
D$20 800
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of depreciation and disposal of non-current assets within the Accountingsyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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