Reference no: EM133030992

Questions -

Question 1 - Calculating depreciation on vehicles: Two vehicle has an estimated useful life of 12 years in the company after which it can be resold for an estimated 10% of its original cost. Vehicle 1: The average replacement cost of a heavy goods vehicle is presently £120,000 Vehicle 2: The average replacement cost of other vehicles is £24,000 per vehicle. You are responsible for the cost of depreciation on these vehicles. Depreciation is to be charged at current replacement cost.

Question 2 - The depot and office which you occupy have a current replacement cost of £3,500,000 and a useful life of 50 years. The land which they occupy has a current resale value of £600,000 and the scrap value of the building materials is estimated at £100,000 at current prices. You are required to budget for depreciation on the buildings on a straight-line basis.