Question

A machine originally had an estimated useful life of 6 years, but after 4 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining:_________.
a. 16 years
b. 4 years
c. 10 years
d. 6 years

Answer 1

Answer:

d. 6 years

Explanation:

Depreciation is the loss of value of an asset over a period of time. The asset has a useful life period after which it is referred to as scrap.

The value of the asset after it's useful life is called the salvage value.

Useful life of an asset is estimated and deductions in its value are made till the useful life is exhausted.

In this scenario the useful life was initially taken to be 6 years.

After 4 years it was realised a mistake wasade and useful life is supposed to be 10 years

Since useful life of the asset remains contstant, the remaining years of useful life is the real estimate of useful life less years already used.

Remaining useful life = 10 - 4 = 6 years