Briefly explain the term depreciation, Accounting Basics

Assignment Help:

Question:

Part A:

Briefly explain the term "depreciation" and give three reasons why do we need to provide for depreciation on fixed assets during a financial year.

Part B:

The following information is available for the year ended 31 December 2007 for Rooney Ltd:

Provision for depreciation (as at 01 January 2007) Rs 25,000
Fixed Assets at costs (as at 01 January 2007) Rs 125,000

Fixed Assets acquired on 01 March 2007 Rs 50,000
Fixed Assets acquired on 01 April 2008 Rs 15,000

(a) Calculate the depreciation figure for the years ended 31 December 2007 and 2008 using:

(i) 20% straight line method of depreciation
(ii) 20% reducing balance method of depreciation

(b) What will be the net book value of Fixed Assets as at 31 December 2007 and 2008 using both methods?


Related Discussions:- Briefly explain the term depreciation

Example of perpetual inventory procedure, Q. Example of perpetual inventory...

Q. Example of perpetual inventory procedure? The Perpetual inventory procedure Companies use perpetual inventory procedure in a range of business settings. In the past companie

General Journal, Received and paid the telephone bill for $231 including GS...

Received and paid the telephone bill for $231 including GST

Microsoft Excel, How do I do case problem level 1 for chapter 3 of succeedi...

How do I do case problem level 1 for chapter 3 of succeeding in business with Microsoft excel 2013?

Final accounts, with help of illustrations,comment on final accounts

with help of illustrations,comment on final accounts

What do you understand by goodwill, Q. What do you understand by Goodwill? ...

Q. What do you understand by Goodwill? Goodwill -- in accounting, difference between what a company pay when it buys theassets of another company and book value of those assets

What is the typical time span for long-range plans?, What is the typical ti...

What is the typical time span for long-range plans? A. More than 1 year C. 3-5 years B. 2-3 years D. About 25 years

The hardware from another defective device , Assume we are a trading compan...

Assume we are a trading company giving devices and sometimes after sales service. when any fault came we just replace the hardware from another defective device and getting the pay

What is t-account, Q. What is T-account? To exemplify recording the inc...

Q. What is T-account? To exemplify recording the increases and decreases in an account texts use the T-account which appear like a capital letter T. The name of the account suc

Find the balance at the end of 6 years of $5000 investment, Find the balanc...

Find the balance at the end of 6 years of $5000 investment in an account with a nominal annual rate of interest of 2.5% compounded quarterly over the first two years and then gro

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