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21) What the meaning of 'residual value'? A) The estimated amount

Question : 21) What the meaning of 'residual value'? A) The estimated amount : 1888826

21) What is the meaning of 'residual value'?

A) The estimated amount that an entity would currently obtain from disposal of the asset, after deducting disposal costs, for an asset of similar age and condition expected at the end of its useful life.

B) The total amount to be expensed through depreciation.

C) The systematic allocation of an asset's depreciable amount over its estimated useful life.

D) The estimated period of time over which an asset is expected to be available for use by an entity.

22) What is the meaning of 'useful life'?

A) The estimated amount that an entity would currently obtain from disposal of the asset, after deducting disposal costs, for an asset of similar age and condition expected at the end of its useful life.

B) The total amount to be expensed through depreciation.

C) The systematic allocation of an asset's depreciable amount over its estimated useful life.

D) The estimated period of time over which an asset is expected to be available for use by an entity.

23) What is the meaning of 'depreciation'?

A) The estimated amount that an entity would currently obtain from disposal of the asset, after deducting disposal costs, for an asset of similar age and condition expected at the end of its useful life.

B) The total amount to be expensed through depreciation.

C) The systematic allocation of an asset's depreciable amount over its estimated useful life.

D) The estimated period of time over which an asset is expected to be available for use by an entity.

24) What is the meaning of 'declining balance method'?

A) The systematic allocation of an asset's depreciable amount allocated in proportion to the productive capacity used.

B) The systematic allocation of an asset's depreciable amount allocated evenly over the asset's estimated useful life.

C) The systematic allocation of an asset's depreciable amount over its estimated useful life.

D) The systematic allocation of an asset's depreciable amount whereby a period's depreciation equals the asset's net carrying amount multiplied by a fixed percentage.

25) What is the meaning of 'units-of-production method'?

A) The systematic allocation of an asset's depreciable amount allocated in proportion to the productive capacity used.

B) The systematic allocation of an asset's depreciable amount allocated evenly over the asset's estimated useful life.

C) The systematic allocation of an asset's depreciable amount over its estimated useful life.

D) The systematic allocation of an asset's depreciable amount whereby a period's depreciation equals the asset's net carrying amount multiplied by a fixed percentage.

26) What is the meaning of 'depreciation'?

A) The systematic allocation of an asset's depreciable amount allocated in proportion to the productive capacity used.

B) The systematic allocation of an asset's depreciable amount allocated evenly over the asset's estimated useful life.

C) The systematic allocation of an asset's depreciable amount over its estimated useful life.

D) The systematic allocation of an asset's depreciable amount whereby a period's depreciation equals the asset's net carrying amount multiplied by a fixed percentage.

27) What factor will not affect the estimated useful life of property, plant or equipment?

A) Legal life of the asset.

B) Technological obsolescence.

C) Competitive pressures.

D) Productive capacity.

28) Hotel-R-Us owns a machine that it purchased on Jan 1, 2010 for $600,000. The machine had an estimated useful life of 5 years and an estimated residual value of $100,000. The company uses the declining balance method with a rate of 20%. The machine was sold on December 31, 2012 for $140,000. What was the accumulated depreciation at December 31, 2012?

A) $292,800

B) $180,000

C) $150,000

D) $76,800

29) Seall-Test Ltd. owns a machine that it purchased on Jan 1, 2010 for $600,000. The machine had an estimated useful life of 10 years and an estimated residual value of $100,000. The company uses the declining balance method with a rate of 20%. The machine was sold on December 31, 2012 for $140,000. What was the depreciation expense for 2011?

A) $50,000

B) $60,000

C) $96,000

D) $120,000

30) What is the meaning of 'replacement cost'?

A) The cost required to replace the productive capacity of an asset.

B) The value of an asset in an input market or output market on the date of measurement.

C) The value expected from the sale of an asset, net of any costs of disposal.

D) The actual cost of an asset at the time it was purchased.

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