User Account

All Pages

Explain the concept of depreciation

Assignment Help Accounting Basics
Reference no: EM132469038

The following information is related to tangible noncurrent assets of Kuro Bhd as at 31 December 2017

 

Cost

RM'000

Accumulated Depreciation

RM'000

Carrying Amount

RM'000

Land

591

-

591

Buildings

300

80

220

Plant and equipment

1,613

458

1,155

Fixtures and fittings

390

140

250

 

2,994

678

2,316

During the year ended 31 December 2017 the following transactions occur and have not been included in the amounts above:

(i) An equipment was acquired on 30 June 2017 at a price of RM154,000. To enable the equipment to be used, it requires a special installation, that cost the company RM5,000. While handling the equipment in their premise before the installation process, a small damage was found and the company paid RM500 to repair it. The damage, however, did not affect the performance of the equipment.

(ii) On 1 May 201T,one of the existing ?xture in the company was installed with an extension that will increase the effectiveness of the ?xture's function. The company has been invoiced for the work amounted to RM40,000 and no payment has been made yet.

(iii) On 1 of July 2017, a new building is purchased at the purchase price of RM300,000. The building is acquired with the recommendation from a property agent that were paid RM4,500 to ?nd an appropriate building in a speci?c location about a month prior. An executive personnel has travelled to the location with the agent few times before the decision to buy is made and the cost amounted to RMSOO. All of these costs have been paid accordingly.

(iv) Depreciation is provided on all assets in use at the year end at the following rates: Buildings 2% per annum reducing balance

Plant and equipment   20% per annum straight line

Fixtures and ?ttings       25% per annum straight line
It is the policy of the company to charge depreciation based on the month a property, plant or

equipment is acquired or disposed. Required:

Question 1: Explain the concept of depreciation and how to determine its value.

Question 2: Explain how a company should apply choices of depreciation methods. Your explanation must be based on the Conceptual Frameworks.

Question 3: Show the journal entries for transactions (i) to (iv) above.

Question 4: Prepare a schedule showing the Property, Plant and Equipment in notes to the ?nancial statements of Statement of Financial Position as at 31 December 2017.

Reference no: EM132469038

Questions Cloud

What was the issue with intel''s old branding : Was this just change for change's sake? Why might it be important for Intel's future business success to promote a new brand image?
Developing favourable attitudes : One key feature of IMS is the emphasis on affecting consumers' behaviourand simply its antecedents, such as increasing brand awareness
Many types of advertising and promotion : List some other terms that people may call advertising. Does it matter that some people don't understand what advertising really is?
Equity and liability are two elements of ?nancial statements : Equity and liability are two elements of ?nancial statements that ?nance a company's assets. Explain these two elements and the main difference between the two
Explain the concept of depreciation : Explain how a company should apply choices of depreciation methods. Your explanation must be based on the Conceptual Frameworks.
What makes conjoint analysis valuable : Please provide an overview of the types of conjoint analysis and how conjoint is different from other quantitative VOC methods.
Why have marketing communication budgets been reallocated : Why have marketing communication budgets been reallocated in recent years to increase expenditure on mobile and digital aspects, and reduce spending
Expenditure on mobile and digital aspects : Why have marketing communication budgets been reallocated in recent years to increase expenditure on mobile and digital aspects, and reduce spending
What arc the fixed costs in a monthly : Determine the Capital Recovery Factors for the calculations of the monthly equivalent fixed costs (per unit) of the 4 devices. What arc the fixed costs

Reviews

Write a Review

Accounting Basics Questions & Answers

  Wendel stove company is developing a professional model

wendel stove company is developing a professional model stove aimed at the home market. the company estimates that

  The amount of interest expense for the first semiannual

A company issued 5-year, 7% bonds with a par value of $105,000. The company received $102,947 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period

  Marginal interest rate on the debt

GL Corporation, a retail firm, is making a decision on how much it should pay out to its stockholders. It has $100 million in investible funds. The following information is provided about the firm:

  What amount of gross profit would the company report

BC Training reports sales revenue of $2,000,000. Average inventory during the year was $200,000. What amount of gross profit would the company report

  What influences have encouraged new developments

What influences have encouraged new developments in management accounting?

  The book basis and tax basis of its assets and liabilities

Education Sciences Company, in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2007.

  Describe how bonds payable differ from notes payable and

describe how bonds payable differ from notes payable and how to account for the issuance of bonds at par at a discount

  Why are the prices different in a and b what are the

a 1000 bond has a coupon of 6 percent and matures after 10 years.a. what would be the bonds price if comparable debt

  Explain the exton and wyeton liabilities

A, ? and C are in partnership at Exton and Wyeton sharing profits in the ratio 4:4:2 . Their Balance Sheet at 31st December, 1962, was as follows.

  Gaap and health care

Some generally accepted accounting principles (GAAP) apply only to health care, and there are many health care organizations that use other comprehensive bases of accounting when GAAP does not apply

  Compute the amount of prior service cost amortization

Compute the amount of prior service cost amortization for the years 2017 through 2022 using the years-of-service method, setting up appropriate schedules.

  The following year-end adjusted trial balance is for tom

the following year-end adjusted trial balance is for tom janes co. at the end of december 31. the credit balance in tom

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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