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United Ltd purchases a company car for £198,000 plus VAT at 17.5%. The car is expected to have a life of three years and a residual value of £90,000. Payment is made partly in cash and partly by trading in an old car with a net book value of £70,560 and a trade-in value of £54,000. The company uses the straight-line basis to depreciate its cars. What is the net book value of the car after one year? A £150,000 B £156,000 C £162,000 D £185,100

United Ltd purchases a company car for £198,000 plus VAT at 17.5%. The car is expected to have a life of three years and a residual value of £90,000. Payment is made partly in cash and partly by trading in an old car with a net book value of £70,560 and a trade-in value of £54,000. The company uses the straight-line basis to depreciate its cars. What is the net book value of the car after one year? A £150,000 B £156,000 C £162,000 D £185,100

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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United Ltd purchases a company car for £198,000 plus VAT at 17.5%. The car is

expected to have a life of three years and a residual value of £90,000. Payment is made

partly in cash and partly by trading in an old car with a net book value of £70,560 and

a trade-in value of £54,000. The company uses the straight-line basis to depreciate its

cars. What is the net book value of the car after one year?

A £150,000

B £156,000

C £162,000

D £185,100

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