Neco Model Questions Vol1 2017 Financial Accounting Question 28

Practice objective / multiple choice question 28 from the 2017 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2017 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 28 NECO_MODEL_QUESTIONS_VOL1 • 2017 • FINANCIAL_ACCOUNTING • objective

A machine was purchased on 1 January 2018 for \(\text{₦}500,000\). Its estimated residual value is \(\text{₦}50,000\) and its original useful life is 5 years. The company depreciated the machine using the straight‑line method for the first two years and then switched to the double‑declining‑balance method for the remaining years. Calculate the depreciation expense for the year ended 31 December 2020 and state the carrying amount of the machine on that date.

Answer Options

A. Depreciation expense for 2020 = \(\text{₦}96,000\); carrying amount on 31 Dec 2020 = \(\text{₦}224,000\).
Correct Answer B. Depreciation expense for 2020 = \(\text{₦}128,000\); carrying amount on 31 Dec 2020 = \(\text{₦}192,000\).
C. Depreciation expense for 2020 = \(\text{₦}140,000\); carrying amount on 31 Dec 2020 = \(\text{₦}176,000\).
D. Depreciation expense for 2020 = \(\text{₦}112,000\); carrying amount on 31 Dec 2020 = \(\text{₦}208,000\).
Correct Answer
B
Correct Option:
Depreciation expense for 2020 = \(\text{₦}128,000\); carrying amount on 31 Dec 2020 = \(\text{₦}192,000\).

About This Question

This is Neco Model Questions Vol1 2017 Financial Accounting Question 28. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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