PEV _ December '03

Jimmyboy1888

Hi,

I dare say I'm being totally dumb but, can someone please explain why depreciation is calculated at 1,000,000.00 (Task 2.2 (i) ) ?

I can't see any note of a residual value, useful life or, when the company was incorporated, in order to calculate 1 year's depreciation ?

Why not 4 years @ 500,000, or any other divisor of the 2,000,000 accumulated depreciation ?

Thanks

Jim

SandyHood

At 30 Nov 2003 the annual charge for the y/e 30/11/03 was £1 million and the accumulated balance in the balance sheet was £2 million.

Task 2.2 asks for the year ending 30 Nov 2004 (stating on 1 Dec 2003)

Bullet 8 under the 30 Nov 2003 Balance Sheet says Depreciation is based on the straight line method

So with the 3 pieces of evidence, the annual charge will be £1 million per year.

Jimmyboy1888

Nice one Sandy, thanks.

Had a feeling I might feel silly !