A Company Buys a Major Piece of Computer Equipment for £100,000

Multiple Choice

A company buys a major piece of computer equipment for £100,000 and expects this to last for 4 years, after which it will most likely be scrapped with no value. At the end of the first year, the financial statements will show:

A) A depreciation expense of £20,000 and a net asset value of £100,000
B) A depreciation expense of £25,000 and a net asset value of £100,000
C) A depreciation expense of £20,000 and a net asset value of £75,000
D) A depreciation expense of £25,000 and a net asset value of £75,000