Vinny purchased some new equipment on 28 February 2016 for 240,000. Vinnys policy is to depreciate equipment

Question:

 Vinny purchased some new equipment on 28 February 2016 for £240,000. Vinny’s policy is to depreciate equipment at 30% per year using the reducing balance method. He calculates a full year’s charge in the year of acquisition and none in the year of disposal.

(a) What will be the depreciation expense in respect of this equipment in Vinny’s financial year ended 31 August 2020?

(b) Suggest why it might be more appropriate to use the reducing balance method of depreciation for certain assets.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: