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Question: Senakuta Co. purchased a machine with an estimated useful life of 5 years for $34,000 on 30 September 20×5. Senakuta Co. planned to scrap the machine at the end of its useful life and estimated that the scrap value at the purchase date was $4000. On 1 October 20×8, Senakuta revised the scrap value to $2000 due to the decreased value of scrap metal.
What is the depreciation charge for the year ended 30 September 20×9?
a. $7000
b. $6800
c. $2800
d. $6400Hello,
Could you explain why the period which had been charged is 3 years to 1 October 20X8 please? I think that the purchase day is the last day of 20X5, and to the first day of 20X8 which is just 2 years. I am very confusedThere are three accounting periods up to 1 October 20X8:
Year ended 30 September 20X5
Year ended 30 September 20X6
Year ended 30 September 20X7Thank you so much!!!
Could you more explain that if the question doesn’t say anything, we will charge the depreciation of machine in full year even though the purchase date is the last day of that year?Sorry, I was being very stupid in my previous reply.
The three years are:
Year ended 30 September 20X6
Year ended 30 September 20X7
Year ended 30 September 20X8And no, there is no depreciation when the purchase date is the last day of the year (unless the questions says ‘a full years charge in the year of purchase’.
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