Gce Model Questions Vol1 2019 Financial Accounting Question 15

Practice objective / multiple choice question 15 from the 2019 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2019 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 15 GCE_MODEL_QUESTIONS_VOL1 • 2019 • FINANCIAL_ACCOUNTING • objective

A machine was purchased on 1 January 2020 for \(£48,000\). Its original estimated residual value was \(£3,000\) and its useful life was 8 years. After three years the company re‑estimates the residual value to be \(£5,000\) and the remaining useful life to be 5 more years. In the fourth year the machine is used for 2,400 hours out of an estimated total of 12,000 hours for the remaining life. Using the units‑of‑production method for the fourth year, calculate (a) the depreciation expense for the fourth year and (b) the carrying amount of the machine on 31 December 2024.

Answer Options

Correct Answer A. Depreciation expense £5,223; carrying amount £25,903
B. Depreciation expense £4,800; carrying amount £26,315
C. Depreciation expense £5,625; carrying amount £25,490
D. Depreciation expense £5,400; carrying amount £25,715
Correct Answer
A
Correct Option:
Depreciation expense £5,223; carrying amount £25,903

About This Question

This is Gce Model Questions Vol1 2019 Financial Accounting Question 15. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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