Neco Model Questions Vol1 2020 Financial Accounting Question 44

Practice objective / multiple choice question 44 from the 2020 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2020 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 44 NECO_MODEL_QUESTIONS_VOL1 • 2020 • FINANCIAL_ACCOUNTING • objective

An asset was acquired on 1 March 2020 for \(500,000\). The depreciation policy is:\n\n- Straight‑line at 10 % per annum for the first six months (1 Mar to 30 Aug).\n- From 1 September onward, the method switches to double‑declining balance. The asset's estimated useful life is 5 years.\n\nCompute (a) the depreciation expense for the year 2020 and (b) the book value of the asset on 31 December 2020. Round amounts to the nearest naira.

Answer Options

A. Depreciation expense - 85,000; Book value - 415,000
B. Depreciation expense - 80,000; Book value - 420,000
C. Depreciation expense - 90,000; Book value - 410,000
Correct Answer D. Depreciation expense - 88,333; Book value - 411,667
Correct Answer
D
Correct Option:
Depreciation expense - 88,333; Book value - 411,667

About This Question

This is Neco Model Questions Vol1 2020 Financial Accounting Question 44. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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