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The following are details of the non-current assets of a new business:
Original cost $27,000
Estimated useful life 3 years
Estimated residual value $3,000
Depreciation method $50 reducing balance
A full year’s depreciation is charged in the year of acquisition.
What is the total depreciation charge of the business in year two?
Hello sir, I do understand how to calculate the depreciation using reducing method but what’s the meaning of $50 reducing balance? Can u help solve this?
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 – they have answers an explanations 🙂
The statement “depreciation method $50 reducing balance’ does not mean anything. I can only guess that it is a typing error in the question and that it is meant to say 50% reducing balance.