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Interior Cabin fittings – replaced 1 April 2005 at cost of $25000 with useful life of 5 years.
on 1 October 2008 company upgraded its cabin facilities at cost of $4500. This did not increase the estimated remaining useful life of the cabin fittings, but the improved facilities enabled the company to substantially increase the air fares on this aircraft.Calculate the depreciation for the year ended 31 march 2008 for the interior cabin fittings.
Carrying value at 1 October 2008 after adding the upgrade cost is $12000,
Could you please explain me why (6/18)*12000 is done to calculate the depreciation for the last 6 months??
For the year ended 31 March 2008, depreciation looks like $25,000 / 5 = $5,000 (have you got your dates right?)
For the year to 31 March, 2009 depreciation for first half year is $2,500
For second half year (cv after addition at 1 October, 2008 is $12,000) depreciation is 6 months of the remaining life of 18 months
The asset was bought on 1 April, 2005 so, at date of addition, the asset has been depreciated by 3.5 years leaving just 1.5 years to go
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