Reference no: EM132588072

Question 1. The A business purchased a motor car on 1 July 2013 for $20,000. It is to be depreciated at 20 per cent per year on the straight line basis, assuming a salvage value at the end of five years of $4,000, with a proportionate depreciation charge.

What is the carrying amount (net book value) of the asset on 1 January 2015.

A $14,000

B $15,200

C $4,000

D $20,000

Question 2. XYZ Company bought a new printing machine on 1 January 20X0. The cost of the machine was $80,000. The installation costs were $6,000, the delivery expenses of $2,000 and professional fees were $1,000.

What should be the net book value on 31 December 20X1, if the salvage value is $3,000 and useful life is 10 years and the company uses declining balance method (20% rate)?

Question 3. A company purchased an asset on 1 January 20X3 at a cost of $1,000,000. The useful life is 25 years. Company uses declining balance method for depreciation with twice the straight line. Residual value is $50,000. The asset was sold on 31 December 20X5 June 2021 for $750,000.

What is gain/loss on disposal?

Question 4. At 31 December 2014 a company's trade receivables totalled $664,000. As of 1 January, the company had an The allowance of 10% must be created. Also during the year, the company has received $3,000 from the customers whose debt was previously written off.

What amount would appear on a statement of Financial position for Receivables and Bad Debt Expense?

            Receivable Bad               Debt Expense

A               $597,600                        69,400

B               $597,600                          63,400

C                 $594,900                         66,100

D                    $594,400                    69,400