The problem from the image asks to calculate the depreciation of a computer system purchased for $45,000 on 1 July, using a straight-line depreciation method with an annual depreciation rate of 12.5%. The depreciation calculation is needed as of 31 December.

Straight-Line Depreciation Formula:

$\text{Depreciation per year} = \frac{\text{Cost}}{\text{Useful life in years}} \quad \text{or} \quad \text{Depreciation per year} = \text{Cost} \times \text{Depreciation rate}$

Given Information:

• Cost of the system = $45,000
• Depreciation rate = 12.5% per annum
• No residual value (i.e., full depreciation is applied over its useful life)
• Purchase date = 1 July
• Depreciation period = from 1 July to 31 December (6 months or half a year)

Step 1: Calculate annual depreciation

$\text{Annual depreciation} = 45,000 \times \frac{12.5}{100} = 45,000 \times 0.125 = 5,625$

Step 2: Depreciation for the period (July to December)

Since the system is purchased in July and the calculation is required until December, we need to account for half a year (6 months): $\text{Depreciation for 6 months} = \frac{5,625}{2} = 2,812.50$

Final Depreciation Value:

The depreciation from 1 July to 31 December is $2,812.50.

Would you like further details or clarification?

Here are some related questions to deepen your understanding:

1. How would the depreciation change if the system had a residual value?
2. What if the depreciation method was reducing balance instead of straight-line?
3. How does the straight-line depreciation method compare to units of production depreciation?
4. What impact does a higher depreciation rate have on financial statements?
5. How is accumulated depreciation recorded in financial accounting?

Tip: When calculating depreciation, always adjust for the time period being calculated, especially if the purchase date is not at the beginning of the financial year.