Suppose a Company Purchases a Van for £21,000 with the Intention

question 21

Multiple Choice

Suppose a company purchases a van for £21,000 with the intention of using it for three years and selling it for £6,000 at the end of the three years.The company uses straight line depreciation.Which of the following statements is correct?

• A) The annual depreciation charge is £7,000
• B) The annual depreciation charge is £21,000
• C) The annual depreciation charge is £5,000
• D) The annual depreciation charge is £15,000

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