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Under straight line method, after full useful life the carrying amount equals:
AOriginal purchase cost
BTwice the residual amount
CEstimated residual value
DZero in all cases
Answer & Solution
Correct answer: C. Estimated residual value
1. SLM depreciates (Cost − Residual) over the useful life.
2. At end of useful life, depreciable amount is fully written off.
3. Net carrying amount = Cost − (Cost − Residual) = Residual value.
_Source: ICAI BoS Foundation Paper 1, Ch 5 "Depreciation & Amortisation", §3.1 ¶1_
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