On 1 January 2018 Panorama Ltd acquired equipment for $22 000, net of GST. The estimated residual value for the equipment is zero. Depreciation is calculated at 10% p.a. on the diminishing-balance basis. The depreciation expense for the year ended 31 December 2020 is:

Question

Quizplus · Accepted Answer

Depreciation rate = 10% p.a.
Depreciation for 2018 = 10% x $22,000 = $2,200
Depreciation for 2019 = 10% x ($22,000 - $2,200) = $1,980
Depreciation for 2020 = 10% x ($22,000 - $2,200 - $1,980) = $1,782

Therefore, the depreciation expense for the year ended 31 December 2020 is $1,782. Option B is the correct answer.

On 1 January 2018 Panorama Ltd Acquired Equipment for $22