Good Day Tutor,can you assist me solve below question
John bought a factory on 1 Jan 20x3 for $180,000.It is depreciated monthly on a straight line method useful live 50 .On 1 July 20x6 the factory was revalued $223,200.
What should the depreciation charge be for the year ended 31 Dec 20x6?
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Depreciation
10y ago#1The new depreciation for the second six months of the year will be based on the revalued amount and (unless told different) you would assume that the useful life remained unchanged and you would therefore divide by 46.5 years (because it had already been used for 3.5 years) to get the new annual rate of depreciation.
10y ago#3Since the depreciation is 25% straight line, it is 25% of cost.
Therefore, the calculation from 1Sep to 30 Nov should be based on a cost of 15,000 - 8,000 = 7,000.
Also, the calculation from 1 Dec to 31 Dec should be based on a cost of 7,000 + 10,000 = 17,000.
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