Calculate the net book value of the new machine

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Question 1 - Gigi Ltd pays $80,000 cash to purchase a new machine and trades in an old machine that has a NBV of $10,000. It is the company's policy to depreciate such machines using Reducing Balance Method at 20% per annum. The scrap value of both the new and old machine is $5,000. Calculate the net book value of the new machine after one year.

Question 2 - Fruity Pte Ltd is a manufacturer of jam. On 1 January 2019, the company bought a new machine at a cost of $120,000 and recorded the following depreciation information as shown below.

End of Year Accumulated Depreciation

2019 $24,000

2020 $43,200

Fruity sold the machine for $80,000 at the end of 2020.

What is the gain or loss on the disposal of the machine?

Reference no: EM133104151

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