Questions On Depreciation Of Fixed Asset
Some questions for readers to practise on topic on depreciation of fixed assets based on straightline basis and reducing or diminishing balance method:
FINANCIAL MATHEMATICS QUESTIONS ON DEPRECIATION 

1 
A firm bought a machine for $20,000 which is expected to be used for 5 years and then sold for $2,000. What is the annual amount of depreciation if the straight line method is used? 
2 
A machine costing $10,000 has an expected life of 4 year and estimated residual value of $500. Calculate the depreciation charge per year 
3 
A machine cost $25,650 depreciates to a scrap value of $500 in 10 years. Calculate: (a) the annual rate of depreciation if the reducing balance method of depreciation is to be used (b) the book value at the end of the sixth year 
4 
A firm estimates that office equipment depreciates in value by 40% in its first year of use, by 25% of its value at the beginning of that year during its second year of use, and thereafter each year 10% of its value at the beginning of that year Calculate: (a) the value after eight years’ of equipment costing $550 new (b) the value when new of equipment valued at $100 after five years’ of use. 
5 
The total cost of a fleet of lorries is $180,00 and the residual value after five years is $20,00. Using the diminishing balance method find the rate of annual depreciation. 
6 
Five word processors are brought for an office, the total cost of the equipment being $12,000. The residual value of the machine after five years is estimated to be $3,000. Find the annual percentage depreciation to be charged if (a) the fixed installment method is used (b) the diminishing balance method is used ( answer to 2 decimal plac 
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