[Abkar]

Shiba Co entered into a lease for a right of use asset on 1 January 20X7. The lease contract is for four years and the useful life of the asset is six years. Information relating to the lease is as follows:

Initial lease liability $48,000
Deposit paid on 1 January 20X7 $2,000
Direct costs incurred by Shiba $5,000
Maintenance costs of $2,000 per annum $8,000

What will be the carrying amount of the right-of-use asset at 31 December 20X8?

$41,250

$31,500

$27,500

$36,667

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