New Zealand Help with depreciation on fixed assets?


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Hey guys,
I'm a first year accounting student and looking for some help understanding a question in an assignment.

A company purchased new fixed assets for $11,000 and had costs of $3,000 to install them and set them up. They will have a value of $2,000 at the end of two years and I am to workout out the depreciation expense using straight line and diminishing value methods.

Am I right in thinking that the depreciable value is $6,000 (cost of asset less expenses and residual value) or is it actually $9,000 (cost of asset less residual value).

Thanks in advance for any help.
 

Steve-LevelUp

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The $11k + $3k is the total asset value ($14k). A $2k resale value leaves $12k as a depreciable value.
 

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