Reducing balance method for depreciation

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May 16, 2024 at 12:09 am #705470
jameela.r
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I don’t understand how to use the reducing balance method to calculate depreciation charge.

Tree Pruning Services has bought chainsaws costing £7,000. These have an estimated useful life of 5 years and salvage value of £400. What is the depreciation charge for year two using the Reducing Balance Method with a percentage of 20%?
a. £1,320 b. £1,056 c. £1,120 d. £1,136
May 16, 2024 at 8:03 am #705493
John Moffat
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Have you watched my free lectures on depreciation where I explain how to calculate reducing balance depreciation?

(And why are you attempting a question for which you do not have an answer? You should be using a Revision Kit – it has answers and explanations.)
May 16, 2024 at 8:08 am #705498
jameela.r
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These are questions from my uni past papers which I need to use for practice. Unfortunately they don’t give us mark schemes
May 16, 2024 at 8:15 am #705501
John Moffat
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Assuming that you are studying for the ACCA exam of Paper FA then you should use a Revision Kit and not past university questions.
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