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Hi Sir,
Can you please help me out with the following question?
On 1st April 2015, Zenith Ltd. purchased a building for $2,000,000. It was decided to charge depreciation @10% p.a. using the Reducing balance method. However, on 1st April 2018, it was decided to change the method of depreciation to Straight-line Method. The remaining useful life of the building is estimated to be 5 years with a residual value of $100,000. What is the depreciation charge for the year ended 31 March 2019?
Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers. It has answers and explanations.
You need to calculate the carrying value as at 31 March 2018 and then use straight line depreciation treating that carrying value as though it was the cost.
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