a vehicle costs pound 15 000 and is to be depreciated using the reducing balance met 611260
A vehicle costs £15,000 and is to be depreciated using the reducing balance method with a percentage rate of 20 per cent. Depreciation to be charged on this vehicle will be as follows:
|
e |
|
|
Cost of vehicle |
16,000 |
|
Depreciation in year 1 (20% of £15,000) |
3,000 |
|
Net book value at end of year 1 |
12,000 |
|
Depreciation in year 2 (20% of £12,000) |
2,400 |
|
Net book value at end of year 2 |
9,600 |
|
Depreciation in year 3 (20% of £9,600) |
1,920 |
|
Net book value at end of year 3 |
7,680 |
|
Depreciation in year 4 (20% of £7,680) |
1,636 |
|
Net book value at end of year 5 |
6,144 |
|
Depreciation in year 5 (20% of £5,144) |
1,229 |
|
4,915 |