MCQ O-LEVEL Principle of accounts for Nov 05

[dasani]

A business owns a machine.
Cost of machine $10000
Estimated life 4 years
Residual value $3000
Depreciation is charged at 20% each year, using thr diminishing balance method.

What is the depreciation charde in year 2 of life of the asset?

Please anyone help me in this MCQ and how i will get the answer.

 

[aaakhtar19]

10000*(20/100)= 2000
10000-2000=8000
8000*(20/100)=1600

Ans 1600
when the method is diminishing balance no
use of scrap value method dats only 4 original cost............

hope it helped

 

[dasani]

thanks a lot