a) On the 1 March 2021 the owner of Petes Plumbing services purchased a new van for $30,500 which included annual registration costs of $500. Peter had a tool chest and side racks for ladders installed for a total cost of $7,000. He paid an additional $1,000 to a signwriter to paint the business's name on the side of the van. What cost figure should be attached to the new van? Which cost(s) should not be included in the cost of the new van? (2 marks)

b) Your friend has just completed her first year of an accounting degree and she is very confused about why a business can choose between three different methods of depreciation and the effect of each method on reported profit. Explain why a business would choose each method and the impact of each method on reported profits. (2 marks) Word limit 100.

c) Your company has polluted the local river during the clearing of land for a new construction project. Under current environmental law, the company will be required to clean-up the river upon completion of the project. The construction of the project is estimated to take three years. The current expected estimate of the costs to clean-up the river is $500,000.

Discuss how your company should record this event in its accounting records, providing evidence to justify your decision. (2 marks) Word limit 100