Tonson Plc had acquired a machine on 1 January 2020 at a cost of £100,000 with an estimated useful economic life of ten years. The fair value of the machine is £52,000 and the selling costs are £4,000. The expected future cash flows are £10,000 per annum for the next five years. The current cost of capital is 10%. An annuity factor for this rate over this period is 3.791. Required: Prepare extracts from the financial statement for the year-ended 31 December 2020. Show all your workings.
Tonson Plc had acquired a machine on 1 January 2020 at a cost of £100,000 with an estimated useful economic life of ten years. The fair value of the machine is £52,000 and the selling costs are £4,000. The expected future cash flows are £10,000 per annum for the next five years. The current cost of capital is 10%. An annuity factor for this rate over this period is 3.791. Required: Prepare extracts from the financial statement for the year-ended 31 December 2020. Show all your workings.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
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Tonson Plc had acquired a machine on 1 January 2020 at a cost of £100,000 with an estimated useful economic life of ten years. The fair value of the machine is £52,000 and the selling costs are £4,000. The expected future
Required:
Prepare extracts from the financial statement for the year-ended 31 December 2020. Show all your workings.
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