An organisation buys a tangible non-current asset for £200,000. It has an estimated scrap value of £20,000 and an expected useful economic life of 10 years.
-What depreciation will be shown in the income statement for year 3?
-How would the non-current asset be shown in the statement of financial position at the end of year 3?
If the asset is sold for £120,000 in year 4, how will this affect:
-the income statement for year 4?
-the statement of financial position at the end of year 4?
How will the sale of the tangible non-current asset affect the firm’s statement of cash flows?