In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis. The balancing adjustment is: a. $3,700,000 b. $4,500,000 c. $4,000,000 d. $3,200,000

In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis. The balancing adjustment is: a. $3,700,000 b. $4,500,000 c. $4,000,000 d. $3,200,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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The balancing adjustment is:

$3,700,000

$4,500,000

$4,000,000

$3,200,000

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Step 1: Capital Allowances on Straight Line basis:-

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Step 2: Computation of Capital Allowances & Balancing Adjustment:-

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