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Chapter 12 Calculation Part 1

The document discusses three methods of calculating depreciation and provides an example of calculating annual depreciation charges for machinery and motor vehicles over multiple years using straight line and reducing balance methods. It includes details on cost, useful life, scrap value, and depreciation rate and asks to show the calculation and effect on financial statements.

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49 views2 pages

Chapter 12 Calculation Part 1

The document discusses three methods of calculating depreciation and provides an example of calculating annual depreciation charges for machinery and motor vehicles over multiple years using straight line and reducing balance methods. It includes details on cost, useful life, scrap value, and depreciation rate and asks to show the calculation and effect on financial statements.

Uploaded by

grayce lim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Three methods of calculating depreciation (part 1)

Question 1

Yu Enterprise provided the following non-current assets


details:

Non-current Method of
assets Date of purchase Details depreciation
Cost=$20000
Useful life=5 years
Machinery 1 January, 2018 Straight line
Estimated scrap
value=$5000
Cost=$8000
Rate of
Motor Vehicles 1 January, 2018 Reducing balance
depreciation=15% per
annum

You are required to show the calculation of annual depreciation charges and the
effect on the financial statements.

Annual depreciation
Non-current Year to 31 Provision for Net Book
expenses (Profit and Loss
assets December depreciation (SOFP) Value
Account)

2017

Machinery 2018

2019

Motor Vehicles 2017


2018

2019

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