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

Explain periodicity assumption of accounting, Q. Explain Periodicity assump...

Q. Explain Periodicity assumption of accounting? As-per to the periodicity (time periods) assumption accountants divide an entity's life into months or years to report its econ

Economic substance of the transaction, Q. Economic substance of the transac...

Q. Economic substance of the transaction? In a few business transactions the economic substance of the transaction conflicts with its legal form. For instance a contract that i

What is the fair labor standard act, What is the Fair labor standard act ...

What is the Fair labor standard act Fair labor standard act (Wages and Hours Law) establishes standards for minimum wages, child labor, overtime pay, required payroll record

Donna, Jan. 1 Purchased a small company and recorded goodwill of $150,000. ...

Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years an

When common stock has a par value of $2, When common stock has a par value ...

When common stock has a par value of $2 and a market value of $15: 1.) the liability of the stockholders is $13 per share 2.) there will be additional paid-in capital of $1

Prepare the adjusting entry needed for hi-tech, Scenario Sara Jones ope...

Scenario Sara Jones opened a technical consulting business called Hi-Tech For the Future earlier in the year. So far, she has been successful in providing services and selling

Code of ethics for auditor, The following situations involve a possible vio...

The following situations involve a possible violation of the MIA ByLaws (on professional ethics, conduct and practice). For each situation, (1) decide whether or not the Code has b

Explain the recording employers payroll taxes, Explain the Recording employ...

Explain the Recording employer's payroll taxes Debited to an expense account-Payroll Tax Expense. Credited to individual Tax Payable accounts These amounts are then sent

Cycle inventory is required , One or more phases in the operation cannot su...

One or more phases in the operation cannot supply all the items it makes concurrently.

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