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Kirkwood Limited intends replacing plant and equipment that has reached the end of its useful life. New plant and equipment will be purchased at a cost of R1 400 000 and a further R200 000 will be incurred on this plant and equipment for transport and installation. The old equipment has a book value of RO but can be sold for R35 000. Removal costs of R6 000 will have to be paid for the old machine. Kirkwood Limited's taxation rate is 28%. The after tax proceeds from the sale of the old asset amount to: A. R25 200 B. R20 880 C. R29 000 OD. R35 000

Kirkwood Limited intends replacing plant and equipment that has reached the end of its useful life. New plant and equipment will be purchased at a cost of R1 400 000 and a further R200 000 will be incurred on this plant and equipment for transport and installation. The old equipment has a book value of RO but can be sold for R35 000. Removal costs of R6 000 will have to be paid for the old machine. Kirkwood Limited's taxation rate is 28%. The after tax proceeds from the sale of the old asset amount to: A. R25 200 B. R20 880 C. R29 000 OD. R35 000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kirkwood Limited intends replacing plant and equipment that has reached the end of its useful life. New plant and equipment will be purchased at a cost of R1 400 000 and a further R200 000 will be incurred on this plant and equipment for transport and installation. The old equipment has a book value of RO but can be sold for R35 000. Removal costs of R6 000 will have to be paid for the old machine. Kirkwood Limited's taxation rate is 28%. The after tax proceeds from the sale of the old asset amount to: O A. R25 200 B. R20 880 O C. R29 000 O D. R35 000 A T O N M F
Transcribed Image Text:Kirkwood Limited intends replacing plant and equipment that has reached the end of its useful life. New plant and equipment will be purchased at a cost of R1 400 000 and a further R200 000 will be incurred on this plant and equipment for transport and installation. The old equipment has a book value of RO but can be sold for R35 000. Removal costs of R6 000 will have to be paid for the old machine. Kirkwood Limited's taxation rate is 28%. The after tax proceeds from the sale of the old asset amount to: O A. R25 200 B. R20 880 O C. R29 000 O D. R35 000 A T O N M F
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