These Are Extracts from the Balance Sheets of Mitchell Ltd

question 12

Multiple Choice

These are extracts from the balance sheets of Mitchell Ltd: $\begin{array}{lrr} &30 \text { June }\\& 2013 & 2014 \\\text { Plant } & \$ 10000 & \$ 15000 \\\text { Accurmulated depreciation - plant } & 4000 & 5000\end{array}$
$\begin{array}{l}\text { The income statement for the year ended } 30 \text { June } 2014 \text { shows: }\\\begin{array}{ll}\text { Depreciation expense - plant } & 1500 \\\text { Proceeds from the sale of plant } & 1600 \\\text { Carrying value of plant sold } & 2500\end{array}\end{array}$ During the year Mitchell Ltd sold plant that had cost $3,000.The accumulated depreciation on the plant sold by Mitchell Ltd during year is:

• A)$4000
• B)$1500
• C)$2500
• D)$500

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Definitions:

Spot Rate

The current price in the marketplace at which a given asset, such as a currency, commodity, or security, can be bought or sold for immediate delivery.

Nominal Risk-free Return

The return on an investment without adjusting for inflation, representing the interest rate on a risk-free security.

Initial Cost

The expenditure incurred at the beginning of a project or investment, including capital investment and operational expenses when applicable.

Home Currency Approach

A method used in international finance where companies evaluate their foreign operations and transactions in their domestic currency.