If a company purchases a machine for £60,000 and charges depreciation at 10% on a diminishing balance basis,what is the depreciation charge in the forth year?

Question

Quizplus · Accepted Answer

The depreciation charge in the fourth year can be calculated as follows:
- Year 1: £60,000 x 10% = £6,000
- Year 2: (£60,000 - £6,000) x 10% = £5,400
- Year 3: (£60,000 - £6,000 - £5,400) x 10% = £4,860
- Year 4: (£60,000 - £6,000 - £5,400 - £4,860) x 10% = £4,374. 
Therefore, the correct answer is B).

If a Company Purchases a Machine for £60,000 and Charges