Question: An organization 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

An organization 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?

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