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Raya has decided to depreciate her fixed assets. She has a printing press which was worth £500 at cost and is estimated to depreciate in value at 15% a year, Reducing balance method. Calculate the NBV at the end of year 3. Showing your working out.

Cost Price = 500 Year 1 = 500-75 = 425 Year 2 = 425 - 63.75 = 361.25 Year 3 = 361.25 - 54.1875 = 307.0625 Therefore the Net Book Value at the end of year 3 will be £307.06
RR
Answered by Raya R. • Accounting tutor
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How to tell if the transaction accounts are debit or credit

A common way to answer this question is to think about where the money comes from and where does it go. For example, if the company buys equipment by cheque, then it shows the money comes out from the bank a...
LZ
Answered by Lance Z. • Accounting tutor
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What are the main differences between financial and management accounting?

Financial accounting is mainly focused on the external users of the financial information. Its main purpose is to communicate the financial position of the company. Preparing the financial statements is mand...
UF
Answered by Umar F. • Accounting tutor
4337 Views

Distinguish between the following two methods of depreciation: straight-line and diminishing balance method.

The straight-line method for depreciation calculates a fixed amount of depreciation over the assets useful life. The reducing balance method calculates the depreciation every year based on the assets net boo...
RB
Answered by Rhea B. • Accounting tutor
9288 Views

What are the advantages of activity based costing?

It improves business processes, it allocates indirect costs based on a product’s cost driver, or the factor that creates the cost. As costs are allocated per product, a picture starts to emerge of which busi...
SK
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