I am in need of some help.
I am running through some practice questions I got from an OCR A Level in Accouting PDF via the internet (really good resource on top of the Kaplan books if you are self studying like me).
Straight line depreciation when not all of the information is provided to you (ie no residual value or life expectancy) is melting my brain. Can someone please help me understand how they reached the following answer with the information given:
Buildings are depreciated at a rate of 4% per annum on the balance in the buildings account at the end of the year.
Balance as at 01.04.16:
Depreciation of buildings £90,000
What is the depreciation amount for the year ending 31.03.07?
The answer is £6800 but for love nor money I cannot reach the same answer.
If somebody would be kind enough to help I would really appreciate it.
Edited at 14 Jul 2016 01:16 PM GMT