Accounting · Non-Current Assets and Provisions
On 1 January 20X6, Avon Ltd acquired a power generator for $20 million with a useful life of five years. Avon Ltd is required to carry out site restoration after 5 years at an estimated cost of $6 million. The discount rate is 10%, and the present value of $1 in five years at 10% is $0.621. Calculate the total profit or loss charge (depreciation plus finance cost) for the year ended 31 December 20X6 related to this equipment and provision (to the nearest $000).
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$6,000,000
- 2$5,373,000
- 3$5,118,000✓
- 4$4,745,000
Correct answer
$5,118,000
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