1. At the start of the year company ABC had machinery at cost for 150 000 and accumulated depreciation for 76 500. Machinery is depreciated using the reducing balance method, with a 30% annual depreciation. At the end of the year, the net book value of machinery is:

Select one:

a. 51450

b. 22050

c. 150000

d. 31500

2. Suppose that company ABC Plc. has a machinery that costed 250,000, with an accumulated depreciation of 130,000. The company sells the machinery for 170,000 in cash. The effect on the financial statements is:

Select one:

a. Cash increases by 170,000; PPE is reduced by 120,000; Profit increase by 50,000

b. Cash increases by 170,000; PPE is reduced by 250,000; Profit decrease by 80,000

c. Cash increases by 170,000; PPE is reduced by 250,000; Profit increase by 50,000

d. Cash increases by 170,000; PPE is reduced by 120,000; Profit increase by 170,000