1
A bus is bought for £56,000. It will be used for four years, and then sold back to the supplier
for £18,000. Show the depreciation calculations for each year using (a) the reducing balance
method with a rate of 25 per cent, (b) the straight line method.
2
A company, which makes up its financial statements annually to 31 December, provides for
depreciation of its machinery at the rate of 15 per cent per annum using the reducing balance method.
On 31 December 2008, the machinery consisted of three items purchased as shown:
£
On 1 January 2006 Machine A Cost 2,000
On 1 September 2007 Machine B Cost 4,000
On 1 May 2008 Machine C Cost 3,000
Required:
Your calculations showing the depreciation provision for the year 2008.