On 1 January 2014 Image Plus Ltd acquired electronic equipment for $18 000, net of GST. It is estimated it will have no residual value. If depreciation is provided at 10% p.a. on the diminishing-balance basis, the depreciation charge for the year ended 31 December 2016 is:

Question

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The diminishing-balance method calculates depreciation on the book value at the beginning of each year. For 2016, the book value is $14,580 (after two years of depreciation: $18,000 - $1,800 - $1,620). The depreciation for 2016 is 10% of $14,580, which is $1,458.

On 1 January 2014 Image Plus Ltd Acquired Electronic Equipment