Neco Model Questions Vol1 2019 Financial Accounting Question 50

Practice objective / multiple choice question 50 from the 2019 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2019 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 50 NECO_MODEL_QUESTIONS_VOL1 • 2019 • FINANCIAL_ACCOUNTING • objective

A machine was purchased for \(\N{Naira}200,000\) with an estimated residual value of \(\N{Naira}20,000\) and a useful life of 5 years. Depreciation is charged using the diminishing‑balance method at a rate that would write the asset down to its residual value at the end of its useful life. After two years the residual value is revised to \(\N{Naira}30,000\) and the useful life is extended by two additional years (total 7 years). Calculate the depreciation expense for the third year (the first year after the revision) and the book value of the machine at the end of that year. Round all monetary amounts to the nearest naira.

Answer Options

A. Depreciation Year 3: \N{Naira}12,800; Book value end Year 3: \N{Naira}67,500
B. Depreciation Year 3: \N{Naira}15,000; Book value end Year 3: \N{Naira}64,000
C. Depreciation Year 3: \N{Naira}13,500; Book value end Year 3: \N{Naira}66,200
Correct Answer D. Depreciation Year 3: \N{Naira}14,119; Book value end Year 3: \N{Naira}65,513
Correct Answer
D
Correct Option:
Depreciation Year 3: \N{Naira}14,119; Book value end Year 3: \N{Naira}65,513

About This Question

This is Neco Model Questions Vol1 2019 Financial Accounting Question 50. It is one of the objective questions from the 2019 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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