PEV December 2007

Pen Registered Posts: 2 New contributor 🐸
Hi everyone

I was wondering if anyone could explain the answer in TASK 2.2 regarding the depreciation of the Pickmaster machines?
I cannot get my head around why there has been 2 years depreciation deducted in the budgeted progit and loss accounts?
Maybe its just revision overload, but I would really appreciate a little help.



  • pennie moore
    pennie moore Registered Posts: 31 Regular contributor ⭐
    hope this helps, the depreciation is worked out by 1 year only if we take pickmaster 1 we do 2000 x 8 = 16,000 as there would be 8 new machines, and for pickmasters2 we do 9,000 x 8 = 72,000
    good luck for monday ! im not looking forward to it at all !!
  • definite.studies
    definite.studies Registered Posts: 88 Regular contributor ⭐
    On page 8 the questions says the two types of machines have depreciation charges of £2000 or £9000 per year being 1/10 th of their purchase prices.

    There are 8 machines, so that gives £16000 or £72000 annually as total depreciation for the 2 options.

    I think you must be misreading the Q somewhere.
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