A company has non-current assets with a net book value totaling $820,000 at the start of the year. Assets costing $95,000 was disposed of. These assets were held for three years at a straight-line depreciation rate of 20%. The depreciation charge for the year was $150,000. If the closing balance for the total non-current assets (at net book value) at the end of the year was $975,000, what value of new assets were purchased during the year?

The value of new assets purchased during the year is $ 400,000 which includes closing balance of non-current assets, depreciation, and cost of assets disposed minus the opening balance of assets.

What is an Asset?

A resource with the economic worth that an individual, company, or country possesses or controls with the hope of future gain is referred to as an asset.

In the given case, we need to calculate the value of assets purchased during the year:

[tex]\rm\,Value\,of\,new\,assets\,purchased\,during\,the\,year = Closing\,balance\,of\,Non\,Current\,assets\,+ \\\,Depreciation\,+ \,Cost\,of\,the\,goods\,sold\,- Beginning\,balance\,of\,Non\,Current\,assets\,\\\\= \$\,975,000\,+\,\$150,000\,+\,\$95,000\,-\,\$820,000\\\\=\$400,000[/tex]

Hence, the value of new assets that were purchased during the year is

$ 400,000.

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