Doris buys a non-current asset for £35 000 on 1 February 20X1.She depreciates assets of this type on the reducing balance basis at a rate of 15% each year.What is the carrying amount of this asset at Doris's year end on 31 January 20X5 (to the nearest £)?
A)£18 270
B)£16 730
C)£14 000
D)£21 000

Question

Quizplus · Accepted Answer

The carrying amount is calculated by applying the reducing balance depreciation method over four years. The formula is: Carrying Amount = Initial Cost * (1 - Depreciation Rate)^Number of Years. Therefore, £35,000 * (1 - 0.15)^4 = £18,270.

Doris Buys a Non-Current Asset for £35 000 on 1