Ruby buys a non-current asset on 1 January 20X2 for £18 000.She plans to depreciate it over a period of 10 years on the straight-line basis, and she estimates that its residual value at the end of the ten-year period will be £2000.What is the carrying amount of the non-current asset at her year end on 31 December 20X6?
A)£10 000
B)£8000
C)£11 600
D)£9000

Question

Quizplus · Accepted Answer

The carrying amount of the non-current asset at the year end on 31 December 20X6 is £10,000. This is calculated as follows:Cost of asset - £18,000Less: Accumulated depreciation (5 years x £1,600) - £8,000Carrying amount - £10,000

Ruby Buys a Non-Current Asset on 1 January 20X2 for £18