Ellie buys a new delivery vehicle on 1 January 20X4 for £15 000.She depreciates vans on a straight line basis over five years.She estimates that she will be able to sell this van on 31 December 20X8 for £750. What is the depreciation charge in respect of this vehicle for Ellie's financial year ended 31 December 20X4?

Question

Quizplus · Accepted Answer

The depreciation charge is calculated by subtracting the estimated residual value (£750) from the cost (£15,000) and then dividing by the useful life (5 years): (£15,000 - £750) / 5 = £2,850.

Ellie Buys a New Delivery Vehicle on 1 January 20X4