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At 31st october 2013 a business had machines with a cost of $120000 and with accumulated depreciation of $25000
On 1st January 2014 they sold a machine for $10000.This machine had originally cost $30000 on 1st April 2012
depreciation policy is at 20% per annum, monthly basis
What is the depreciation expense for the year??
Pls sir answer me don’t get angry with me?
I beg UYou have not said whether it is straight line or reducing balance depreciation.
I will assume that it is straight line (i.e. 20% of cost).
From 31 October 2013 to 1 January 2014 (2 months) the assets had cost 120,000, and so the depreciation is 2/12 x 20% x 120,000 = 4,000
From 1 January 2014 to 31 October 2014 (10 months) the assets had a cost of 90,000 (120,000 – 30,000) and so the depreciation is 10/12 x 20% x 90,000 = 15,000.
So the total depreciation is 4,000 + 15,000 = 19,000.
(and I never get angry 🙂 )
Thnks for the reply.. Clearly understood sir
I wish I could hire your brain only for ACCA exams.. 🙂
Plus its just my curiosity, want it to get it cleared..
How many questions do u receive per day and Are u the sole owner of this website?
Do u really feel happy answering the questions from worldwide or do u get bored repeating each yr the same stuff!
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