XD plc prepares its financial statements for the year ended

XD plc prepares its financial statements for the year ended 31 December. XD charges
depreciation straight line basis. XD acquired a machine on 1 January, 2014 for £70,000 , it is
expected that the machine will last until 31 December 2020 when it will be sold for £14,000.
What will be the net book value (cost less accumulated depreciation) of the machine on 31
December, 2018?

Solution

Accumulated depreciation on 31 December, 2018 = (70000-14000)/7*5= 40000 Net book value on 31 December, 2018 = 70000-40000 = 30000