Financial Statements Paper 2 1.5D
Deaniedani
Registered Posts: 26
How do i get to the answer of £8,000? Please help.
0
Comments
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@deaniedani please post the question so our community can help you0
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Hi,
Straight line Basis Formula:
(Cost - Residual Value) / Useful Economic Life
Residual Value is how much it can be sold for.
Please see below the workings:
Use formula above:
(£20,000 - £4,000) / 4 Years = £4,000 (This is the Depreciation charge each year; this is fixed each year)
Machine @ Cost 1.7.20X0 = £20,000
Year 1 Depreciation: (£4,000) (Deduct)
Carrying Amount @ Year 1 = £16,000
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Machine @ Cost 30.6.20X1 = £16,000
Year 1 Depreciation: (£4,000) (Deduct)
Carrying Amount @ Year 2 = £12,000
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Machine @ Cost 30.6.20X2 = £12,000
Year 1 Depreciation: (£4,000) (Deduct)
Carrying Amount @ Year 3 = £8,000
---------------------------------------------------------------------------------------------------------
Machine @ Cost 30.6.20X3 = £8,000 (This is the Carrying Amount)
Hope this helps.0 -
it really did, than you so much.1
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