1. **Problem Statement:** Matt bought a delivery van for 14000 on 1 July 2019. The van has a useful life of 4 years and a residual value of 3000 at the end of 4 years. Depreciation is to be calculated at 30% per year on the reducing balance basis. We need to find the depreciation charge for the year ended 30 June 2020. 2. **Formula and Explanation:** Reducing balance depreciation means depreciation is charged on the book value (cost minus accumulated depreciation) at the start of each year. The formula for depreciation charge in the first year is: $$\text{Depreciation} = \text{Cost} \times \text{Depreciation rate}$$ Important rule: The residual value is not directly used in the reducing balance method calculation for each year but is considered in the overall asset valuation. 3. **Calculation:** Cost = 14000 Depreciation rate = 30% = 0.30 Depreciation for the first year: $$14000 \times 0.30 = 4200$$ 4. **Interpretation:** The depreciation charge for the year ended 30 June 2020 is 4200. 5. **Answer:** The correct option is 3. shs. 4200.