Neco Model Questions Vol1 2017 Financial Accounting Question 43

Practice objective / multiple choice question 43 from the 2017 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2017 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 43 NECO_MODEL_QUESTIONS_VOL1 • 2017 • FINANCIAL_ACCOUNTING • objective

A machine is purchased for ₦500,000. Its estimated useful life is 5 years and its residual value is ₦50,000. The company depreciates the asset using the double‑declining‑balance method for the first two years and then switches to the straight‑line method for the remaining years. Determine the depreciation expense for each of the five years and state the book value of the machine at the end of year 5.

Answer Options

A. Depreciation - Y1: ₦180,000; Y2: ₦110,000; Y3: ₦45,000.00; Y4: ₦45,000.00; Y5: ₦45,000.00. Book value at end of year 5 = ₦55,000.
B. Depreciation - Y1: ₦210,000; Y2: ₦130,000; Y3: ₦42,500.00; Y4: ₦42,500.00; Y5: ₦42,500.00. Book value at end of year 5 = ₦52,500.
Correct Answer C. Depreciation - Y1: ₦200,000; Y2: ₦120,000; Y3: ₦43,333.33; Y4: ₦43,333.33; Y5: ₦43,333.33. Book value at end of year 5 = ₦50,000.
D. Depreciation - Y1: ₦250,000; Y2: ₦150,000; Y3: ₦40,000.00; Y4: ₦40,000.00; Y5: ₦40,000.00. Book value at end of year 5 = ₦60,000.
Correct Answer
C
Correct Option:
Depreciation - Y1: ₦200,000; Y2: ₦120,000; Y3: ₦43,333.33; Y4: ₦43,333.33; Y5: ₦43,333.33. Book value at end of year 5 = ₦50,000.

About This Question

This is Neco Model Questions Vol1 2017 Financial Accounting Question 43. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

View More Neco Model Questions Vol1 2017 Financial Accounting Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support