17 Rashid provided the following balances at 31 December
machinery at cost $52,000
provision for depreciation of machinery $23000
Depreciation for the year was calculated at 20% on cost and is included in the balance for the provision. After the balances had been extracted, it was found that machinery repairs costing $2000 had been debited in error to the machinery account.
What is the correct balance on the provision for the depreciation of machinery account?
A $21000 B $22600 C $23400 D $25000
machinery at cost $52,000
provision for depreciation of machinery $23000
Depreciation for the year was calculated at 20% on cost and is included in the balance for the provision. After the balances had been extracted, it was found that machinery repairs costing $2000 had been debited in error to the machinery account.
What is the correct balance on the provision for the depreciation of machinery account?
A $21000 B $22600 C $23400 D $25000
Answers & Comments
Answer:
b 22600
Explanation:
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Answer:
Explanation: Let's break down the information provided and calculate the correct balance on the provision for the depreciation of machinery account.
Original Provision for Depreciation:
The original provision for depreciation was $23,000.
Depreciation for the Year:
Depreciation for the year was calculated at 20% on the cost of the machinery.
Cost of the machinery is $52,000.
Depreciation = 20% of $52,000 = $10,400.
Machinery Repairs Error:
Machinery repairs costing $2,000 were erroneously debited to the machinery account. This means the machinery account was overstated by $2,000.
Now, let's adjust for these factors:
Adjusted Provision for Depreciation = Original Provision + Depreciation for the Year - Machinery Repairs Error
Adjusted Provision for Depreciation = $23,000 + $10,400 - $2,000
Adjusted Provision for Depreciation = $31,400 - $2,000
Adjusted Provision for Depreciation = $29,400
So, the correct balance on the provision for the depreciation of machinery account is $29,400.
The provided options do not exactly match the calculated value, but the closest option is:
C) $23,400