Depreciation of non-current assets

SEKOLAH HARAPAN BANGSA

ACADEMIC YEAR 2022/2023

Score Teacher’s Signature Parent’s Signature

Name : Adinda Nathania D.S

Subject : Accounting
,,
Class : JC1 Science & Social
Day/ Date : Thursday, 6 october 2022
Time :

Answer all questions.

1. A machine purchased on 1 January 2010, $60,000. It is expected to have a useful life of five years and to be
sold for $10,000 at the end of 2014. It is depreciated using straight-line method.
Provision per year = (cost – residual value)/useful life
= ($60,000 - $10,000)/5 years
= $10,000
Required:
a. Prepare the Provision for Depreciation of Machine account for each year. [10]
$ $

31 Dec 2010 Balance c/d 10,000 31 Dec 2010 Income statement 10,000

31 Dec 2011 Balance c/d 20,000 1 Jan 2011 Balance b/d 10,000

31 Dec 2011 Income Statement 10,000

20,000 20,000

1 Jan 2012 Balance b/d 20,000

1 Jan 2012 Income Statement 10,000

30,000

Income statement

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 $ $

31 Dec 2010 Provision for 10,000

depreciation of
machine

b. Prepare a Statement of Financial Position extract to show the cost, depreciation and book value of the
Machine at the end of each year. [10]
Cost Depreciation Net book value

$ $ $

2010 Machine 60,000 (10,000) 50,000

2011 Machine 60,000 (20,000) 40,000

2012 Machine 60,000 (30,000) 30,000

2013 Machine 60,000 (40,000) 20,000

2014 Machine 60,000 (50,000) 10,000

2. A motor vehicle bought at 1 January 2012, $20,000. It is expected to have useful life of five years.
Depreciation is to be calculated at the rate of 30% per annum on the reducing balance.
a. Calculation: [10]
Cost 20,000

2012 30% x 20,000 (6,000)

14,000

2013 30%% x 14,000 (4,200)

9,800

2014 30% x 9,800 (2,940)

6,860

2015 30% x 6,860 (2,058)

4,802

2016 30% x 4,802

b. Prepare the Provision for Depreciation of Motor vehicle account for each year. [10]
$ $

31 Dec 2012 Balance c/d 6,000 31 Dec 2012 Income Statement 6,000

1 Jan 2013 Balance c/d 1 Jan 2013 Balance b/d 6,000

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 c. Prepare a Statement of Financial Position extract to show the cost, depreciation and book value of the
Motor vehicle at the end of each year. [10]
Cost Depreciation Net book value

$ $ $

2012 Motor vehicle

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