Question

Satine Enterprise Ltd. Recently bought a new company car for $25 000. The firm expects to replace it in five years' time. The current market resale value of the car in five years' time is $2900. The company uses an annual 35% depreciation rate.

1. Use the reducing balance method of depreciation to calculate the net book value of Satine Enterprise Ltd.’s new company car after the first two years.

Answer 1

$4,420

Step-by-step explanation:

$25,000-$2,900=$22,100/5=$4,420