On 1 July 2009 Tom bought a machine for $15 500.

He depreciates machinery at a rate of 20% per annum on the reducing balance basis. A full year’s depreciation is charged in the year an asset is purchased. His year end is 31 October. What is the depreciation charge on the machine for the year to 31 October 2009?

a. $3100

b. $2480

c. $2232

d. $1984 ACCA adaptedLO1.