A business purchased a machine on the Ist January 2018 at a cost of £100,000. At the time of acquisition, the useful economic life was estimated to be 5 years. It is anticipated that in 5 years' time it might be worth £40,000 although the current selling price of an equivalent machine of 5 years old is £20,000. What is the depreciation charge for the period ending 31 December year 2020? a) £16,000 b) £12,000 c) £8,000 d) £4,000
A business purchased a machine on the Ist January 2018 at a cost of £100,000. At the time of acquisition, the useful economic life was estimated to be 5 years. It is anticipated that in 5 years' time it might be worth £40,000 although the current selling price of an equivalent machine of 5 years old is £20,000. What is the depreciation charge for the period ending 31 December year 2020? a) £16,000 b) £12,000 c) £8,000 d) £4,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1.
Transcribed Image Text:A business purchased a machine on the Ist January 2018 at a cost of £100,000. At
the time of acquisition, the useful economic life was estimated to be 5 years. It is
anticipated that in 5 years' time it might be worth £40,000 although the current
selling price of an equivalent machine of 5 years old is £20,000. What is the
depreciation charge for the period ending 31 December year 2020?
a) £16,000
b) £12,000
c) £8,000
d) £4,000
Transcribed Image Text:Creamy Mist Ltd is planning to carry a major reorganization of its operations. The reorganization of
operations would lead company to incur significant redundancy .costs. At what point should Creamy
Mist recognize a provision for the expected redundancy costs?
The expected timetable is as follows:
18 September 2019-> The reorganization plan is first discussed in a board meeting
10 October 2019-> Board approves the plan for the reorganization
30 October 2019-> Board's decision is communicated to employees and published in newspapers
10 November 2019-> The labour union agrees to the redundancy plan
30 November 2019-> Reorganization is completed
10 November 2019
O 18 September 2019
O 10 October 2019
O 30 October 2019
O 30 November 2019
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education