O Level Accounting (7707)•7707/11/M/J/22

Explanation
Ambiguous depreciation starting point for newly purchased asset Steps:
- The motor vehicles were bought on 1 May 2021 for 0 on that date.
- The phrase "had been depreciated by $6,200" refers to prior owner's depreciation, which does not transfer to Alf's provision account.
- For the full year to 1 May 2022, calculate depreciation as 20% × 7,000 using reducing balance on purchase cost.
- Provision balance on 1 May 2022 is $7,000, but this is not among the options.
Not enough information to match any option, as the role of $6,200 in Alf's accounts is unclear.
Final answer: Not enough information.
Topic: Accounting for depreciation and disposal of non-current assets
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