Mighty Models Acquired a Machine for $20 000 on 31

question 14

Multiple Choice

Mighty Models acquired a machine for $20 000 on 31 December 2018. Calculate depreciation for the year ended 31 December 2020 using the diminishing-balance method at 12% p.a. Assume a nil residual value.

• A) $1800
• B) $2000
• C) $2112
• D) $2400

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Definitions:

Cash Balances

The total amount of cash or cash equivalents that a company has accessible at any given time.

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, principles, and procedures used in the compilation of financial statements to ensure accuracy and fairness.

Interim Reporting

Financial statements prepared and published at intervals less than a fiscal year, typically quarterly or semi-annually, to provide updates on a company's performance.

Accounting Principles

The rules and guidelines that companies follow when preparing financial statements, ensuring accuracy, consistency, and transparency.