The plant and machinery account (at cost) of a business for the year ended 31 December 20X5 was as follows:
| Plant and machinery – cost | | 20X5 | | $ | 20X5 | | $ | | 1-Jan | Balance b/f | 240,000 | 31-Mar | Transfer to disposal account | 60,000 | | 30-Jun | Cash purchase of plant | 160,000 | 31-Dec | Balance c/f | 340,000 | | | 400,000 | | | 400,000 |
The company’s policy is to charge depreciation at 20% per year on the straight line basis, with proportionatedepreciation in the years of purchase anddisposal.
What should be the depreciation charge for the year ended 31 December 20X5?
A. $68,000
B. $64,000
C. $61,000
D. $55,000
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