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    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
    Additions during FY: $150000
    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
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    (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
    Additions during FY: $150000
    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?
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    Thank You👍👍. But how do you get the 10 years life?
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    (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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