PEV December 2007

Pen

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.

Thanks

pennie moore

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 !!
Pen

definite.studies

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.