CIMA BA3 · Chapter 10 · Question 7 of 10
A building was bought for $500,000 and was being depreciated straight-line over 50 years with no residual value. After 10 years, when accumulated depreciation was $100,000, it was revalued to $600,000. Its remaining useful life is unchanged. What is the annual depreciation charge after the revaluation?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $15,000
Explanation
After 10 of 50 years, the remaining useful life is 40 years. Depreciation after revaluation = revalued amount / remaining useful life = $600,000 / 40 = $15,000 a year.
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