CIMA BA3 · Chapter 10 · Question 2 of 10
A vehicle costing $32,000 is depreciated at 25% a year using the reducing balance method. What is its carrying amount at the end of the third year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $13,500
Explanation
Year 1: $32,000 x 75% = $24,000. Year 2: $24,000 x 75% = $18,000. Year 3: $18,000 x 75% = $13,500.
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