Depreciation charge

sscors
sscors Registered Posts: 72 Epic contributor 🐘
Hey I don't get why deprec is charged again in this question

On 31 Dec 20X3 a business sells a van which it bought on 1 Jan 20X0 for 6000 and has depreciated each year at 25% by the straight line method assuming nil residual. The business charges a full years charge in the year of acquistion and none in the year of disposal. It trades this van in for a new one costing 10000 and pays supplier 9200.

In the soln in accum deprec ledger account credit side there is a bal b/d of 4500 and deprec charge of 2500. Not sure why deprec charge is there?

Any ideas much appreciated

Comments

  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
    The business charges a full years charge in the year of acquisition
    a new one costing 10000
    depreciation is 25%

    £2,500 represents the 25% of the new acquisition
    Sandy
    sandy@sandyhood.com
    www.sandyhood.com
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