In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annualallowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straightlinebasis.The balancing adjustment is:a. $4,000,000b. $3,200,000c. $3,700,000d. $4,500,000

In 2018 an asset was purchased for $8,000,000. It was not eligible for initial allowance. annualallowance rate was 10%. The asset was sold in 2022 for $8,500,000. Capital allowance is on the straightlinebasis.The balancing adjustment is:a. $4,000,000b. $3,200,000c. $3,700,000d. $4,500,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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Question

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 straightline
basis.
The balancing adjustment is:
a. $4,000,000
b. $3,200,000
c. $3,700,000
d. $4,500,000

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