IGCSE/GCSE/O & A Level/IB/University Student Forum

Qualification => Subject Doubts => GCE AS & A2 Level => Commerce => Topic started by: avin on November 03, 2011, 02:30:27 pm

Title: Account help
Post by: avin on November 03, 2011, 02:30:27 pm

If the question is:

The depreciation for the equipment is 10% straight line. It is expected that it has a residue value of $ 4000.

Is the formula for this depreciation is (cost - residue value) *10%  ???

What happen if the question doesnt specify the depreciation method but only give us the accumulated depreciation, depreciation expense, cost price and the percentage of depreciation?

How should i know which depreciation to follow??

Thanks in advance.

Title: Re: Account help
Post by: Dasith on November 05, 2011, 01:50:15 am

Since they've given the % , calculate the st.line dep from cost & see if you get the Dep exp
IF not
Use reducing balance [COST-(Accumulated.DEP)] x % = SEE IF YOU GET THE DEP EXPENCE theve given

they should fall into one them...

Title: Re: Account help
Post by: avin on November 05, 2011, 12:57:34 pm

Thanks Dasith,

for the first part, we still need to minus the residue value from the cost before times the % right?

[(cost - residue value)/ useful life] * %

Title: Re: Account help
Post by: Dasith on November 05, 2011, 03:18:45 pm

yeap u minus from cost if there is supposed to be a scrap/ residual value @ da end

Title: Re: Account help
Post by: avin on November 06, 2011, 12:12:12 am

Thanks Dasith, u helped me a lot.