Explain straight-line method of depreciation

Assignment Help Cost Accounting
Reference no: EM13510346

The fixed asset accounts of Kuni ltd. as at 31st December 2003 were as follows:


Cost

Accumulated

depreciation

Net book

Value


Sh.

Sh.

Sh.

Freehold land and buildings

1,550,000

-

1,550,000

Plant and machinery

1,275,400

838,500

436,900

Motor Vehicles

897,000

516,000

381,000

Furniture

725,000

332,000

3 93,000

The company uses straight-line method of depreciation to depreciate fixed assets at following rates:

i) 10% per annum on plant and machinery

ii) 20% per annum on vehicles, and

iii) 12 % per annum on furniture

It is the company's policy to make a full year's charge in the year of purchase and no deprecation in the year of disposal. The following additional information is relevant to the calculation of depreciation for the year to 30th December 2004

i. Freehold land and buildings were re-valued by Mwamuko registered valuers at a surplus of Sh.1, 200,000.

ii. An item of Machinery bought on January 2000 for Sh350, 000 is now recognized to have a useful life of at least 20 years.

iii. A vehicle bought on 1st July 2000 for Sh.450, 000 was traded in at a value of Sh.240, 000 in part exchange for a new vehicle costing 600,000.

iv. Included with the furniture is an item which originally cost Sh.215, 000 and which is already fully depreciated and not expected to realise much from use or disposal.

v. An item of plant bought in 2001 at a cost of 500,000 is disposed in the year at 350,000.

Required:

a) Prepare a schedule of fixed assets movements and balances for the year to 31St December 2004.

Reference no: EM13510346

Questions Cloud

What factors should you consider in making your decision : Your investment advisor calls to suggest that you invest in Mexican bonds with a yield of 8.5 percent -3 percent above U.S. Treasury rates. Should you do it? What factors should you consider in making your decision?
Time value of money : 1. (Time Value of Money) You can borrow and lend money at 18% in the market. You have $200,000. You are considering entering into a perfectly competitive market by starting a business today. You will need to pay $120,000 as your fixed costs for an..
Prepare a report to the group financial director of sizacom : Evaluate, with reasons, the recognition and measurement of customer acquisition costs; and discuss the current income tax and deferred tax implications of the customer acquisition costs for Sizacom Ltd.
Find how far does putty-block system compress the spring : A 0.480 kg block is attached to a horizontal spring that is at its equilibrium length, and whose force constant is 24.0 N/m. How far does the putty-block system compress the spring
Explain straight-line method of depreciation : It is the company's policy to make a full year's charge in the year of purchase and no deprecation in the year of disposal. The following additional information is relevant to the calculation of depreciation for the year to 30th December 2004.
Calculate the following confidence intervals for s2 : 6. A certain population of individuals has a mean IQ of 100, but the variance is unknown. In a random sample of 21 individuals, the sample variance was s2 = 204. Calculate the following confidence intervals for σ2
Evaluate the tension in the string : A 35.0 cm violin string with linear density 0.66 g/m is placed near a loudspeaker that is fed by an audio-oscillator of variable frequency. What is the tension (in newtons) in the string
Write newtons second law equation : A 330-g air track cart on a horizontal air track is attached to a string that goes over a pulley with a moment of inertia of 5.00 x 10-6 kg?m2 and a radius of 1.35 cm. Write Newton's second law equation for each of the three objects
Determine the e?ects of a particular insecticid : In an agricultural experiment to determine the e?ects of a particular insecticide, a field was planted with corn. Half the plants were sprayed with the insecticide, and half were unsprayed. Several weeks later, independent random samples of 20..

Reviews

Write a Review

 

Cost Accounting Questions & Answers

  Find the equity in income of sacco for 2010

uppose Dawson has the ability to significantly influence the operations of Sacco-Find the equity in income of Sacco for 2010

  Which of following is not classified as operating activity

Which of the following is a non-cash transaction that should be disclosed in a schedule accompanying the statement of cash flows?

  Evaluate journal entry for the first installment payment

Evaluate journal entry for the first installment payment on December 31, 2013.

  Q1 rno companys market for the model 55 has changed

q1. rno companys market for the model 55 has changed significantly and rno has had to drop the price per unit from 265

  Examination of accounting records of a fictitious business

An examination of the accounting records of a fictitious business, the Clowney Company, disclosed a high contribution margin ratio and production at a level below maximum capacity.

  What is the justification for using backflush costing

What is the goal of the EOQ model, why does a firm hold "safety stock" and what costs are a firm trying to balance when it decides on how much safety stock to hold?

  Explain cash account in the ledger of hawkins company

Explain Cash account in the ledger of Hawkins Company

  Questionuse the spreadsheet provided to do this assignment

questionuse the spreadsheet provided to do this assignment. kite corporation a merchandiser currently completed its

  Purpose a schedule showing the determination of goodwill

Purpose a schedule showing the determination of goodwill,

  The business cuella-ro

The business CUELLA-RO S.A. has the following data related to its equity structure in 2009. Define six strategies for it to change from situation A to objective situation B, desirably for 2010.

  Evaluate wcr expense ratios

ABC Company sells widgets in three varieties (red, yellow and blue) but has lost money for the past three years.

  How does each company value its inventory

What is the difference between the 10K, the 10Q and the 8K reports and how does each company value its inventory

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd