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    Hey guys, this looks really simple but I haven't done reducing balance in a while and I can't figure it out.

    For the Y/E 31st August 2012:

    Cost:
    As at 1st September 2011: 6545
    Additions: 407
    As at 31st August 2012: 6952

    Depreciation:
    As at 1st September 2011: 5736
    Charge for the year: 307
    As at 31st August 2012: 6033

    Net book value:
    As at 31st August 2012:919
    As at 31 August 2011: 819

    Depreciation is on a reducing balance at 25%. How did they work out the charge and depreciation? Thanks

    Edit: No worries, figured it out, I cant figure out how to delete this post so yehh.
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    (Original post by Loafing.Charizard)
    Hey guys, this looks really simple but I haven't done reducing balance in a while and I can't figure it out.

    For the Y/E 31st August 2012:

    Cost:
    As at 1st September 2011: 6545
    Additions: 407
    As at 31st August 2012: 6952

    Depreciation:
    As at 1st September 2011: 5736
    Charge for the year: 307
    As at 31st August 2012: 6033

    Net book value:
    As at 31st August 2012:919
    As at 31 August 2011: 819

    Depreciation is on a reducing balance at 25%. How did they work out the charge and depreciation? Thanks

    Edit: No worries, figured it out, I cant figure out how to delete this post so yehh.
    I get 304 or 307

    I would approach as 6952-5736= 1216 @ 25% =304
    But 819 +407=1226 @ 25% =306.5

    There is a mistake in the question as.6545-5736=809 not the 819 as given.

    I suspect mistake by question setter is the issue, cannot have two answers.
 
 
 
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