Wong Purchased a Computer for $15 000, Net of GST

question 15

Multiple Choice

Wong purchased a computer for $15 000, net of GST. Originally it had an estimated useful life of 4 years and a residual value of $3000. The straight-line method is used. At the start of the third year of usage Wong revised the life of the computer to a total life of 6 years. The residual value had not changed. What depreciation expense should be recorded for the computer for year 3?

• A) $1500
• B) $1000
• C) $3000
• D) $4000

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Definitions:

Assignment

The passing of property or rights from one individual to another.

Indorsement

The act of signing one's name on the back of a cheque or other negotiable instrument to make it payable to someone else.

Without Recourse

A term indicating that the holder of a financial instrument, such as a note or bill, cannot demand payment from the original issuer in case of default by the borrower.

Indorsement

The act of signing one's name on the back of a check or other negotiable instrument, legally transferring ownership or authorizing a transaction.