GCE Book Keeping 2015 Objective — Question 19
Question 19 of 40 from the General Certificate of Education (GCE) Book Keeping 2015 Objective paper, with the correct answer and a full explanation.
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Use the following information to answer this question and the next. Table: Cost of machinery = #325,000; Useful life = 8 years; Salvage value = #25,000. The net book value at the end of the first year is
- A. #287,500Correct
- B. #300,000
- C. #325,000
- D. #350,000
Explanation
Annual depreciation (straight line) = (Cost - Salvage value)/Useful life = (325,000-25,000)/8 = #37,500. Net book value at end of year 1 = 325,000 - 37,500 = #287,500.
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