A computer is being depreciated at 40% using the reducing balance method. If it cost £3,500 in
year 1, what will the net book value be at the end of year 2?
a) £700
b) £1,260
c) £1,400
d) £2,100
b) £1,260
Year 1
Cost £3,500
Depreciation (40% x 3500)(£1,400)
Net book value £2,100
Year 2
Depreciation (40% x 2100) (£840)
Net book value £1,260
Business
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