Question

A2.- Costs incurred to install a machine in a factory for use are: B. C. D. capital expenditures. current assets. shown in the statement of profit or loss and other comprehensive income for the year. A3 On 1 January 2017, a machine was bought at a cost of $33.000. The machine is to be depreciated at 20% per annum using reducing balance method. The net book value of the machine as at 31 December 2019 will be: A. B. C. D. $19,800 $16.896 $21,120 $13.200 A4. The "accumulated depreciation" is: A B a a liability account contra account to bad debt expense. an expense account contra-asset account to trade receivables C. D a

Answer 1

Solution 2) Cost incurred to install a machinery in a factory for use is are capital Expenditure cost incurred before the use of machinary is treated as Capital expendi tine

A-3) machinery Alc at particulars Ant at particulars Ant =H7 Purchase 33,000 3+1217 depreciation 6600 $3,000°x20;). 3. cloling balance 26400 ...33,000 33,000 H-8 purchase 5280 26,400 312-17 Depreciation (26400 X 20 ) i clisting Balance 21120 26,400 26,400 4-19 purchase 21,120 341217 Depreciation . 4224 (21,120x20;-) I desing Balance 16,896 21120 : 2120

A-4) Accumulated Depreciation It is the cumulative depreciation of an asset up to a single point in its life. It is a contra asset account, meanind its natural balance is a credit that reduces the overall asset slatie