Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company purchases a specialist piece of machinery for 60,000 at the beginning of year 1.The machinery is depreciated over its useful economic life which

A company purchases a specialist piece of machinery for 60,000 at the beginning of year 1.The machinery is depreciated over its useful economic life which has been estimated at 12 years.At the beginning of year 3 the directors decided to revalue the company's machinery.The cost today of a new asset of similar type would be 20% higher than the original historical cost.At the end of year 3 the accountant calculated the depreciation expense based on the revalued asset cost. At what net book value would the machinery be carried following the revaluation at the beginning of year 3 and accounting for the depreciation for year 3?

a. 64,800 b. 48,000 c. 50,000 d. 60,000 e. 40,000

the correct answer was A, please also explain why

thank you

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Managerial Accounting

Authors: Charles T Horngren, Jr Walter T Harrison

2nd Edition

0135080193, 9780135080191

More Books

Students also viewed these Accounting questions