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Cataract Co purchases a machine for which the supplier’s list price is 28000$.Cataract pays 23000$ in cash and trades in an old machine which has a net book value of 8000$.It is the company’s policy to depreciate such machines at the rate of 10% per annum on cost.
What is the net book value of the machine after one year?
Why are you attempting questions for which you do not have answers? You should be using a Revision Kit from one of the ACCA approved publishers – they have answers and explanations.
The cost of the new machine is $28,000 – how they pay for it is not relevant.
The net book value after one year is 28,000 – (10% x 28,000).
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