04-16-2007, 06:24 PM
Good advice by Mr. Kamran but I can help you out for the second question, only this time )
Q2the plant and machinery cost account of a company is shown below.the companyâs policy is to charge depreciation at 20% on the straight line basis,with proportionate depreciation in years of acquisition and disposal.
PLANT AND MACHINERY-COST
2005 $
1 jan balance 280,000 30 june transfer disposal 14,000
1 april cash 48,000 1 sep cash 36000
31 dec balance 350,000 ----------
-------- 364000
364000
what should be the depreciation charge for the year ended 31 dec 2005?
Opening Balance ==> Full Year's Depreciation will be charged on 266,000 (280,000 - 14,000)= 53,200
On 14,000 (Disposal) Depreciation would be for six months (14,000 x 20% x 6/12)= 1,400
On April Acquisition of 48,000 for 9 months (48,000 x 20% x 9/12) = 7,200
On September Acquisition of 36,000 for 4 months (36,000 x 20% x 4/12) = 2,400
So the total depreciation for the year ended 31 Dec 2005 would be 64,200 ( 53,200 + 1,400 + 7,200 + 2,400)
Q2the plant and machinery cost account of a company is shown below.the companyâs policy is to charge depreciation at 20% on the straight line basis,with proportionate depreciation in years of acquisition and disposal.
PLANT AND MACHINERY-COST
2005 $
1 jan balance 280,000 30 june transfer disposal 14,000
1 april cash 48,000 1 sep cash 36000
31 dec balance 350,000 ----------
-------- 364000
364000
what should be the depreciation charge for the year ended 31 dec 2005?
Opening Balance ==> Full Year's Depreciation will be charged on 266,000 (280,000 - 14,000)= 53,200
On 14,000 (Disposal) Depreciation would be for six months (14,000 x 20% x 6/12)= 1,400
On April Acquisition of 48,000 for 9 months (48,000 x 20% x 9/12) = 7,200
On September Acquisition of 36,000 for 4 months (36,000 x 20% x 4/12) = 2,400
So the total depreciation for the year ended 31 Dec 2005 would be 64,200 ( 53,200 + 1,400 + 7,200 + 2,400)
