1 What is depreciation and why is it charged in calculating a company’s profit? 2 What causes depreciation? 3 What factors are taken into account in arriving at the annual depreciation charge? 4 Do all assets depreciate? 5 Differentiate between the Straight Line method and the Reducing Balance method. 6 Calculate the depreciation that should be charged to the company’s profits from the following extract: A vanwas purchased for €35,000. At the end of five years, its scrap valuewasworth €5,000. Find the annual depreciation cost per annum. 7 What does the Disposal Account calculate?
