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Hi John. I do not understand question 7.19. How is this worked out. I hope you can help out.
Do you mean 7.9 (as you have written in the heading) or 7.9 (as you have written in the post)?
On 1 October the cost of the assets were 200,000 and it stayed at 200,000 until 1 April when they bought more.
So the depreciation for the period 1 October to 1 April, which is 6 months, is 6/12 x 20% x 200,000.
On 1 April the cost went up to 250,000 and stayed at 250,000 until 30 June. So the depreciation for the period 1 April to 30 June, which is 3 months, is 3/12 x 20% x 250,000.
On 30 June the cost went down to 210,000. So the depreciation for the period 30 June to 31 September is 3/12 x 20% x 210,000.
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