Non-current asset movement equation

Steps:

• Calculate carrying value of disposed asset: sale proceeds $20,000 minus profit$5,000 equals $15,000.
• Set up equation: opening balance $100,000 plus additions minus depreciation$8,000 minus disposed value $15,000 equals closing balance$80,000.
• Simplify: $100,000 -$8,000 - $15,000 =$77,000.
• Solve for additions: $80,000 -$77,000 = $3,000.

Why A is correct:

• The asset movement formula (opening + additions - depreciation - disposals = closing) directly yields $3,000 as the expenditure.

Why the others are wrong:

• B ignores the net effect of disposal and depreciation on the balance change.
• C equals depreciation only, omitting additions and disposals.
• D overstates by confusing gross disposal proceeds with net asset movement.

Final answer: A