The following extracts are made from the books of Agama Enterprises.

Motor van (cost)	120000
Life span	4 years
rate of Depreciation	40%

Method of depreciation used is Diminishing Balance The scrap value of the asset at the end of year four is

 

daomigreat

4 months ago

The answer is A oo it is the depreciation charge for that year that is equal to 10368

Chubi23

2 months ago

Don't be confused. The correct answer is A. The formula for diminishing/reducing balance method in accounting for depreciation is 1 minus the nth root of residual value all over the cost.

1 minus the 4th root of the unknown value (ie scrap value) divided by #120000 is equated the depreciation rate which is 40%.

When you solve for the unknown value, you get an answer of #15,552

prinxee

3 months ago

it is wrong
the answer is 15552