Neco Model Questions Vol1 2018 Financial Accounting Question 46
Practice objective / multiple choice question 46 from the 2018 Neco Model Questions Vol1 Financial Accounting examination.
A machine was purchased for \(\text{₦}500,000\). The company depreciates it using the straight‑line method for the first two years and then switches to the double‑declining‑balance method for the remaining three years. The estimated residual value used for the straight‑line calculation is the same value that the company expects at the end of the five‑year life. After the five years the book value of the machine is \(\text{₦}40,000\). What was the estimated residual value (in naira) that the company originally used for the straight‑line depreciation?
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About This Question
This is Neco Model Questions Vol1 2018 Financial Accounting Question 46. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Financial Accounting examination.
Difficulty level: Medium .
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