Question
A business purchased a machine on the 1st January 2016 at a cost of 280,000. At the time of acquisition, the useful economic life was
A business purchased a machine on the 1st January 2016 at a cost of 280,000. At the time of acquisition, the useful economic life was estimated to be 10 years. It is anticipated that in 10 years time it might be worth 30,000 although the current selling price of an equivalent machine of 10 years old is 40,000. The business carries out annual reviews of the useful economic lives of its assets. On 1 January 2020, the remaining life is estimated as being only 4 years. What is the depreciation charge for the period ending 31 December year 2020? Assuming the residual value has not changed.
36,000
28,000
30,000
46,000
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