mediate Financial Accounting
1. On October 5, 2019, NOON Co. acquired a new machine at a cost of Birr 250,000. The machine has a
useful life of 5 years and scrape value of Br. 10.000. It is estimated that the machine will produce 2,000,000
units of products throughout its life. The equipment produced 95,000 units and 300,000 units of products
during the fiscal periods ending December 31, 2019 and December 31, 2020 respectively. On the basis of
the above data, compute depreciation expense to be recorded on Dec. 31, 2019 and Dec. 31, 2020.
A plant asset priced at Br. 100,000 is acquired by trade-in a similar asset that has a book value of Br.
25,000 Assuming that the trade-in allowance is Br. 30,000 and that Br. 70,000 cash is paid for the new
asset. What is the cost basis for the new assets & financial reporting purpose?
A) Br. 100,000
B) Br. 70.000
C) Br. 30,000
D) Br. 125,000
E) None
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