On 31 December 2017, a New Motor Vehicle with a Useful

question 70

Multiple Choice

On 31 December 2017, a new motor vehicle with a useful life of five years and an estimated residual value of $5,000 was purchased by a business at a cost of $35,000. The amount of depreciation expense charged for the six months ended 30 June 2018, using the straight-line method, is:

• A)nil.
• B)$3,000.
• C)$25,000.
• D)$4,000.

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Definitions:

Objective

A goal or target that is aimed to be achieved, often used in planning and strategy contexts.

Compounded Semi-Annually

Interest on an investment that is calculated twice a year and added to the principal sum, affecting the total interest earned.

Economic Equivalent

A comparison of the economic attributes of two or more investment or financial scenarios to determine their relative value or financial impact.

Missed Payment

Failure to make a required payment by its due date.