| |
Solution 9.6
Straight
line approach
|
Cost €20,000 – scrap €4,800
4 years |
=
€3,800 per annum |
Reducing
balance approach
|
|
€ |
|
Original
cost |
20,000 |
|
Depreciation
end of year 1 (€20,000 x 30%) |
6,000 |
|
NBV
end of year 1 |
14,000 |
|
|
|
|
Depreciation
end of year 2 (€14,000 x 30%) |
4,200 |
|
NBV
end of year 2 |
9,800 |
|
|
|
|
Depreciation
end of year 3 (€9,800 x 30%) |
2,940 |
|
NBV
end of year 3 |
6,860 |
|
|
|
|
Depreciation
end of year 4 (€6,860 x 30%) |
2,058 |
|
NBV
end of year 4 |
4,802 |
|