A company has a financial year end of 31 December. It purchased a new machine on 1 May 20X5 for £73,200. At this date the company estimated the residual value at £6,000. The company’s policy is to depreciate machinery monthly at 10% on the straight-line basis. On 31 December 20X6 the company changed its depreciation policy to 12.5% on the straight-line method with zero estimated residual value.
What is the depreciation expense for the machine for the year 20X7?
A £7,750
B £9,150
C £9,632
D £9,789

Answer rating: 100% (QA)

12 13 straight line Depreciation on 20X5 1 may 20X... View the full answer