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Sir , can you explain how they calculated depreciation of plant and equipment? And how they got 20% and why as my knowledge you have to deduct cost from accumulated depreciation so in question why they didn’t deduct 19000 and then they could calculate for depreciation?
The very last line of note (iii) in the questions answers both your problems
And we NEVER deduct cost from accumulated depreciation!
Where depreciation is to be calculated on a reducing balance basis, we deduct accumulated depreciation from cost … maybe you’re confusing it with that
(5 years = 20%)
OK?
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