Answer to Question #317886 in Management for fanasi

Question

Koos van der Merwe’s Mobile Advertising Agency specialises in selling advertising space on his trucks to a variety of businesses in the Limpopo Province. He has 10 huge trucks, with plenty of advertising space, doing daily dilveries to a variety of clients all over the province.

John Smith’ Commercial Ambulance business, on the other hand, specialises in buying and selling second-hand ambulances. At present he has 10 such vehicles for sale on his showroom floor. (10)

Will the 10 trucks belonging to Koos vd Merwe’s Mobile Advertising Agency be classified as fixed or current assets? Why?

Will the 10 trucks belonging to John Smith’s Commercial Ambulances be classified as fixed or current assets? Why?

Answer 1

they are fixed assets because they are long-lived