Gce Model Questions Vol1 2017 Financial Accounting Question 29

Practice objective / multiple choice question 29 from the 2017 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2017 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 29 GCE_MODEL_QUESTIONS_VOL1 • 2017 • FINANCIAL_ACCOUNTING • objective

A machine was purchased on 1 January 2018 for £48,000. It has a residual value of £6,000 and a useful life of 6 years. The company depreciates the asset using the straight‑line method for the first three years and then switches to the reducing‑balance method at a rate of \(40\%\) per annum on the remaining book value for the next three years. The machine was sold on 1 July 2022 for £12,000. Calculate: (a) the accumulated depreciation up to the date of sale, (b) the book value at the date of sale, (c) the gain or loss on disposal.

Answer Options

Correct Answer A. Accumulated depreciation £33,744; Book value £7,776; Gain £4,224
B. Accumulated depreciation £32,400; Book value £8,200; Gain £3,800
C. Accumulated depreciation £33,000; Book value £8,000; Gain £4,000
D. Accumulated depreciation £34,200; Book value £6,600; Loss £1,400
Correct Answer
A
Correct Option:
Accumulated depreciation £33,744; Book value £7,776; Gain £4,224

About This Question

This is Gce Model Questions Vol1 2017 Financial Accounting Question 29. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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