Depreciation Help Watch

1. 1.How to calculate percentage depreciation charge??

2.What is the life expectancy of Equipment?

X commenced a business a number years ago with Equipment costing \$250000. On 31 Dec 1996 it sold some of that Equipment and replaced it with Equipment costing \$150000.

Depreciation schedules at 31 Dec 1996:
Fixed Assests:
Cost at Start of FY: \$250000
Disposal during FY: (\$100000)
Cost at End of FY: \$300000

Deprciation:
Accumulated at Start FY: \$50000
Charge this FY: \$30000
Disposal during FY: (\$20000)
Accumulated at End FY: \$60000
2. (Original post by 9902)
1.How to calculate percentage depreciation charge??

2.What is the life expectancy of Equipment?

X commenced a business a number years ago with Equipment costing \$250000. On 31 Dec 1996 it sold some of that Equipment and replaced it with Equipment costing \$150000.

Depreciation schedules at 31 Dec 1996:
Fixed Assests:
Cost at Start of FY: \$250000
Disposal during FY: (\$100000)
Cost at End of FY: \$300000

Deprciation:
Accumulated at Start FY: \$50000
Charge this FY: \$30000
Disposal during FY: (\$20000)
Accumulated at End FY: \$60000
The charge this year is £30 the cost is £300 so rate this year is 10% on cost. This can be seen reflected in Cost b/fwd 250, Depcn b/fwd 50 and the disposed assets £100 and depn on disposed £20 indicating the assets have been fully depreciated for two years prior to the year in question.

So you can deduce 10% on cost and a 10 year life.

Does that make sense?
3. Thank You👍👍. But how do you get the 10 years life?
4. (Original post by 9902)
Thank You👍👍. But how do you get the 10 years life?
If you know the annual charge is 10% SL ,which we infer from the 30/300, then after 10 years the item is fully depreciated, therefore 10 years.

i.e. 100%/10%=10

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