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Question - Fixed Assets & Depreciation
Let us say at 31 July 20X6, Rays International had non-current assets which had cost $310,000. At the same date, the accumulated depreciation on the assets was $120,000. The company had not disposed of any non-current assets during the year to 31 July 20X7, but acquired an asset at a cost of $79,200 on 1 January 20X7.
Rays International depreciates non-current assets at a rate of 25% per annum.
Required - What is the company's depreciation charge for the year to 31 July 20X7 using:
a. The straight line method
b. The reducing balance method
Assume that depreciation is charged from the first year of acquisition.
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