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    Depreciation using reducing balance

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    I have a question in a text book and not sure how they worked the answer out, I seem to get the incorrect answer when doing the example, unless the text is wrong...which could be possible. Please show workings and explain.

    Question relates to J blog, public accountant, for 6 months ending 31 December 2018

    Trial Balance as at 31 December 2018 (extract)

    Office Equipment - at cost 65 000
    Accumulated Depreciation - Office equip 20 000
    Motor Vehicle - at cost 68 000
    Accumulated Depreciation - Mot veh 18 000

    Adjustment to be made at 31 December 2018

    Depreciate office equipment at 25% p.a using the reducing balance method, On 1 November 2018 office equipment with a cost of $5000 (excluding gst) was acquired.

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    Solution Preview

    Dear Student,

    Please find attached your solution. Formulas are in the Excel file.


    Rao Sabir Ali(CA,CIMA-UK)

    Trial Balance as at 31 December 2018 (extract)

    Office Equipment - at cost                                   65 000
    Accumulated Depreciatioin - Office equip                                    20 ...

    Solution Summary

    This solution helps calculate depreciation by reducing balance.