Depreciation quiz 2

Office equipment was purchased for $155,000. Its useful life is 5 years and the residual value is $20,000.

What is the depreciation expense for the second year?

• $27,000

• $54,000

• $81,000

• $135,000

Office equipment was purchased for $155,000. Its useful life is 5 years and the residual value is $20,000.

The total net book value at the beginning of year 4 is

• $27,000

• $81,000

• $74,000

• $101,000

A motor vehicle was bought for $12,500; using the reducing balance method at a rate of 20%, what is the value of the motor vehicle after depreciation of 3 years?

• $1,600

• $2,500

• $5,000

• $6,400

A business buys a non-current asset for $10,000. The business estimates that the asset will be used for five years, and will then have no scrap value. Using the straight line depreciation method what is the Net Book Value after 3 years?

• $6,000

• $8,000

• $2,000

• $4,000

A computer equipment is bought on 1 July for $14,000. The accounting year ends on 31 December. What is the depreciation at the end of the year if it depreciates at 20% per annum

• $1,400

• $2,800

• $11,200

• $12,600

A business buys a non-current asset for $10,000. If the business used the reducing balance depreciation method (assume 40% p.a.), what will be the depreciation on year 3.

• $1,440

• $2,160

• $2,400

• $3,600

A motor vehicle was bought for $20,000. It is to be depreciated at a rate of 10% on cost each year.

What is the estimated useful life of the motor vehicle?

• 2 years

• 5 years

• 10 years

• 20 years

A motor vehicle which costs $150,000 is to be depreciated by 10% per annum. It is expected to remain in the business for 4 years.

Using the Reducing Balance Method, what is the net book value of the motor vehicle at the end of the 4 years?

• $98,415

• $98,145

• $100,145

• $109,350

Plant and Machinery at cost $25,000

Furniture on cost $7,000

Net Book Value:

- - Plant and Machinery $7,500

- - Furniture $5,950

Depreciation is charged at a rate of 5% on cost for all Non-Current Assets (Fixed Assets).

How many years has the Furniture been depreciated?

• 3

• 5

• 7

• 11

On the first day of a financial year, equipment was bought for $9,500. It is to be depreciated by the straight line method at the rate of 20%. If the equipment was sold 3 years later for $4,250, what was the profit or loss on the disposal of the asset?

• Profit $386

• Loss $386

• Profit $450

• Loss $450