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hi, in 1st janaruary 2014, plant and equipment original cost $948500; depreciation $571400 and tnet bok value $377100 and annual depreciation charge rate@10%(straight line).additional information:1.an item of plant which was purchased in 2010 for $200000 is now recognized to have a useful life of another 16 years.2. what is the annual dep charge for 31 december,2014.?
Please do not simply set test questions and expect a full answer. You must have an answer in the same book in which you found the question, and you should ask about whatever it is in the answer that you are not clear about – then I will help you.
With regard to the item purchased for $200,000, you need to calculate its net book value (carrying value) and then calculate depreciation on this figure in the normal way on its new useful life.
With regard to the rest of the items, which have an original cost of 748,500, the depreciation on these will be the normal 10% of cost.