Over how many months should the vehicle be depreciated if it is sold on 1 October 2023?
Understand the Problem
The question is asking for the number of months over which the vehicle should be depreciated if sold on 1 October 2023, considering its purchase date and depreciation guidelines.
Answer
The vehicle should be depreciated over $12$ months.
Answer for screen readers
The vehicle should be depreciated over $12$ months.
Steps to Solve
-
Identify the date of vehicle sale
The vehicle is sold on 1 October 2023. -
Determine the financial year end
The business's financial year ends on 31 December each year. -
Calculate the time from last financial year end to sale date
From 31 December 2022 to 31 December 2023 is 12 months.
From 31 December 2022 to 1 October 2023 is:
- January to September = 9 months
-
Count the remaining months in the current financial year
The time frame from 1 October 2023 until the next financial year end (31 December 2023) is 3 months (October, November, December). -
Total depreciation period
Add the months from the last financial year end (9 months) to the months remaining in the current financial year (3 months):
$$ 9 + 3 = 12 \text{ months} $$
The vehicle should be depreciated over $12$ months.
More Information
The vehicle was considered for depreciation from the end of the last financial year (31 December 2022) to when it was sold on 1 October 2023, which includes the remainder of 2023.
Tips
- Confusing the financial year end with the sale date.
- Forgetting to count full months properly or not considering the months after the last financial year end.
AI-generated content may contain errors. Please verify critical information
