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Questions and Answers
Which of the following is the correct formula to calculate annual depreciation using the straight-line method?
Which of the following is the correct formula to calculate annual depreciation using the straight-line method?
- (Cost + Residual Value) / Estimated Useful Life
- (Cost - Residual Value) / Estimated Useful Life (correct)
- Cost / (Estimated Useful Life - Residual Value)
- (Cost - Residual Value) * Estimated Useful Life
What is the carrying value of the machinery on June 30, 2021?
What is the carrying value of the machinery on June 30, 2021?
- 1,500,000
- 3,200,000
- 2,700,000
- 1,350,000 (correct)
What is the journal entry to record the impairment loss on June 30, 2021?
What is the journal entry to record the impairment loss on June 30, 2021?
- Debit Machinery 1,890,000, Credit Accumulated Depreciation 1,890,000
- Debit Machinery 1,540,000, Credit Accumulated Depreciation 1,540,000
- Debit Loss on Impairment 1,540,000, Credit Machinery 1,540,000 (correct)
- Debit Loss on Impairment 1,890,000, Credit Machinery 1,890,000
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