Neco 2021 Financial Accounting Question 18

Practice objective / multiple choice question 18 from the 2021 Neco Financial Accounting examination.

Neco 2021 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 18 NECO • 2021 • FINANCIAL_ACCOUNTING • objective

A machine was purchased on 1\ Jan\ 2020 for \(\text{₦}500,000\). It has a residual value of \(\text{₦}50,000\) and a useful life of 5\ years. The company used the straight‑line method initially. After two full years, on 1\ Jan\ 2022, management revised the residual value to \(\text{₦}30,000\), reduced the remaining useful life to 3\ years and switched to the diminishing‑balance method at a rate of \(40\%\) per annum applied to the opening book value each year. Determine the depreciation expense for the year ended 31\ Dec\ 2022 and the carrying amount of the machine at that date.

Answer Options

Correct Answer A. Depreciation expense \(\text{₦}128,000\); carrying amount \(\text{₦}192,000\)
B. Depreciation expense \\(\\text{₦}96,000\\); carrying amount \\(\\text{₦}216,000\\)
C. Depreciation expense \\(\\text{₦}120,000\\); carrying amount \\(\\text{₦}200,000\\)
D. Depreciation expense \\(\\text{₦}140,000\\); carrying amount \\(\\text{₦}180,000\\)
Correct Answer
A
Correct Option:
Depreciation expense \(\text{₦}128,000\); carrying amount \(\text{₦}192,000\)

About This Question

This is Neco 2021 Financial Accounting Question 18. It is one of the objective questions from the 2021 Neco Financial Accounting examination.

Difficulty level: Medium .

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