[masrey]

hi i’m student at F9 paper and i really confused about calculating CAs we used three methods during the course ,could you tell me which one i should use ? thank you

machine has a cost 40 000 and it has 4 year life and residual value 5000 . 25 % dep allow and the tax is 20 %

method 1
year 1 40 000 * .25 = 10000 *.20 = 2000
years 2 *.75= 7500 *.20 = 1500
year 3 *075=5625 *.20 = 1125
year 4 40000 – ( 10000+7500+5625+5000)
= 11875 *.20 = 2375

method 2

year 1 40000* .25 = 10 000 *.20 = 2000
year 2 8000 *.20 = 1600
year 3 6400 *.20 = 1280
year 4 40000 – ( 10 000+8000+6400+5000)
= 10600 *.20 = 2120

method 3

CAs = 40000* .25 = 10 000 *.20 = 2000 for the first three years
and year 4 = 40 000 – ( 10000*3= 30000 + 5000)
= 5000 *.20 = 1000

kind regards

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