In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis. The balancing adjustment is: A Balancing Charge of $3,700,000 A Balancing Allowance of $4,500,000 A Balancing allowance of $3,200,000 A Balancing Charge of $3,200,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annual allowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straight-line basis.

The balancing adjustment is:

  1. A Balancing Charge of $3,700,000
  2. A Balancing Allowance of $4,500,000
  3. A Balancing allowance of $3,200,000
  4. A Balancing Charge of $3,200,000 
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