Explain methods of calculating depreciation, Financial Accounting

Assignment Help:

The financial year of Jack and Jill Ltd will end on 31 May 2008. At 1 June 2007, the company had in use equipment with a total accumulated cost of Rs 135,620 which had been depreciated by a total of Rs 81,734. During the year ended 31 May 2008, Jack and Jill Ltd purchased new equipment costing Rs 47,800 and sold off equipment which had originally cost Rs 36,000 and which had been depreciated by Rs 28,224, for Rs 5,700. No further purchases or sales of equipment are planned for May. The policy of the company is to depreciate equipment at 40% using the diminishing balance method. A full year's depreciation is provided for on all equipment in use by the company at the end of each year.

Required:

a) Show the following ledger accounts for the year ended 31 May 2008:

(i) The equipment account ;
(ii) The provision for depreciation on equipment account ;
(iii) The asset disposal account ;

b) Give four reasons why depreciation might occur.

c) Explain briefly two methods of calculating depreciation.


Related Discussions:- Explain methods of calculating depreciation

Which actions are most likely to directly increase cash, Which of the follo...

Which of the following actions are most likely to directly increase cash as shown on a firm's balance sheet? Explain and state the assumptions that underlie your answer. 1. It i

determine the hibor , The following are the three-month HIBOR and three-ye...

The following are the three-month HIBOR and three-year EFN futures prices for September 2010 contracts.   a Determine the HIBOR in three-months for settling the futures

Jj, liabilities and its types

liabilities and its types

Taxtomy of intermediaries, Ask quwhats taxtonomy of intermediaries estion #...

Ask quwhats taxtonomy of intermediaries estion #Minimum 100 words accepted#

What is short sale, Q. What is Short Sale? Short Sale - Sale of an item...

Q. What is Short Sale? Short Sale - Sale of an item before it is purchased. A person entering into a short sale believes that the price of item will decline between date of the

Compute the npv of the cash flows, Ace Company has a 30 percent marginal ta...

Ace Company has a 30 percent marginal tax rate and uses a 12% discount rate to compute NPV. The firm started a venture that will yield the following before-tax cash flows: year 0,

Group retained profits-group accounts, Group retained profits Retained pr...

Group retained profits Retained profits ideally should be the amounts that can be distributed as dividends. Therefore,  in arriving at group retained profits, careful attention s

Joint Audit, Impact of joint Audit on financial reporting quality

Impact of joint Audit on financial reporting quality

Concepts, what is the implication of applying accounting concepts wrongly

what is the implication of applying accounting concepts wrongly

Write Your Message!

Captcha
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