QUESTION 1

Calculation of total cost of van Amount paid for purchase of van ($3 250 + $750) Overhauling cost to put the van in working order Additional accessories purchased Total cost to be debited to van account $ 4 000 1 600 350 5 950

QUESTION 2
Calculation of total cost of building $ Amount paid for purchase of building Commission paid to property dealer for purchase of building Legal charges paid for purchase of building Net cost of demolishing the building($1 200 $400) Cost of reconstructing the building Cost of water connection and electric fittings accounted for Total cost to be debited to building account 40 000 1 000 1 500 800 72 500 1 200 117 000

Question 5 (a) 20X4/20X5 Machine A Machine B

Calculation of Annual Depreciation under Straight Line method $

( (

$40 000($40 000 10%) 6 $20 000($20 000 10%) 6

) ) 12
6

6 000 1 500 7 500 $

Total depreciation for20X4/20X5 under straight line method 20X5/20X6 Machine A Machine B (b)

( (

$40 000($40 000 10%) 6 $20 000($20 000 10%) 6

) 12 )

1 500 3 000 4 500 $ 8 000 4 000 12 000 $ 3 200 3 200

Total depreciation for20X5/20X6 under straight line method Calculation of Annual Depreciation under Reducing Balance method 20X4/20X5 Vehicle A ($40 000 20%) Vehicle B ($20 000 20%) Total depreciation for20X4/20X5 under reducing balance method

20X5/20X6 Vehicle B *($20 000 $4 000) 20%+ Total depreciation for20X5/20X6 under reducing balance method QUESTION 6
(a) Calculation of Annual Depreciation under Straight Line method 20X2 Vehicle A ($40 000 15%) Vehicle B ($60 000 15%) Total depreciation for20X2 under straight line method 20X3 4 Vehicle A *($40 000 15%) /12+ Vehicle B ($60 000 15%) Total depreciation for20X3 under straight line method (b) 20X2 Vehicle A Vehicle B Calculation of Annual Depreciation under Reducing Balance method ($40 000 25%) ($60 000 25%)

$ 6 000 2 250 8 250 $ 2 000 9 000 11 000

$ 10 000 15 000

Total depreciation for20X2 under reducing balance method 20X3 Vehicle B *($60 000 $15 000) 25%+ Total depreciation for20X3 under reducing balance method QUESTION 7 (a) 20X7 Jan 01 Super Motors ($30 000 2) 20X8 Jan 01 Balance b/d Sep 01 Cash 20X9 Jan 01

25 000 $ 11 250 11 250

Vehicles Account $ 60 000 60 000 35 000 95 000 95 000 _____ 95 000

20X7 Dec 31 20X8 Dec 31

Balance c/d Balance c/d

$ 60 000 95 000 _____ 95 000 30 000 65 000 95 000 $ 18 000 18 000 16 100 34 100 34 100 16 065 50 165 $ 17 505 14 000 31 505

Balance b/d

20X9 Jun 30 Dec 31

Vehicles Disposal a/c Balance c/d

(b) 20X7 Dec 31 20X8 Dec 31

20X9 Oct 31 Dec 31 (c) 20X9 Jun 30 Dec 31

Provision for Depreciation Account $ 20X7 Balance c/d 18 000 Dec 31 20X8 Balance c/d 34 100 Jan 01 _____ Dec 31 34 100 20X9 Vehicles Disposal (W 2) 17 505 Jan 01 Balance c/d 32 660 Dec 31 50 165 Vehicles Disposal Account $ 20X9 Vehicles account 30 000 Jun 30 Income statement (profit) 1 505 Jun 30 31 505

Income Statement (W 1) Balance b/d Income statement (W 1)

Balance b/d Income Statement (W 1)

Provision for depreciation Cash

WORKINGS (W 1)

Calculation of Annual Depreciation 1 30 000 (9 000) 21 000 (6 300) 14 700 (4 410) Machines 2 30 000 (9 000) 21 000 (6 300) 14 700 (2 205) 3 35 000 Total 18 000 (3 500) 31 500 (9 450) 16 100 16 065

Cost of Machines Depreciation of 20X7 Depreciation of 20X8 Depreciation of 20X9 (W.4) Total depreciation on machine sold ($9 000 + $6 300 +$2 205) = $17 505

QUESTION 8
(a) 20X3 Jan 01 20X4 Jan 01 20X5 Jan 01 Sep 30 20X6 Jan 01 Classic machines ($20 000 2) Balance b/d Balance b/d Cash Machinery Account $ 20X3 40 000 Dec 31 Balance c/d 20X4 40 000 Dec 31 Balance c/d 20X5 40 000 Sep 30 Machinery Disposal a/c 24 000 Dec 31 Balance c/d 64 000 44 000 $ 40 000 40 000 20 000 44 000 64 000

Balance b/d

(b) 20X5 Sep 30 Dec 31

Machinery account Income statement (profit)

Machinery Disposal Account $ 20X5 20 000 Sep 30 1 500 Sep 30 21 500

Provision for depreciation Cash

$ 11 000 10 500 21 500

(c) 20X3 Dec 31 20X4 Dec 31

20X5 Oct 31 Dec 31

Provision for Depreciation Account $ 20X3 Balance c/d 8 000 Dec 31 20X4 Balance c/d 16 000 Jan 01 _____ Dec 31 16 000 20X5 Machinery Disposal (W.4) 11 000 Jan 01 Balance c/d 13 200 Dec 31 24 200 20X6 Jan 01

Income Statement(W.1) Balance b/d Income statement(W.2)

$ 8 000 8 000 8 000 16 000 16 000 8 200 24 200 13 200

Balance b/d Income Statement(W.3)

Balance b/d $8 000 $8 000 $8 200 $4 000 4 000 3 000

WORKINGS (W.1) 20X3 ($40 000 20%) (W.2) 20X4 ($40 000 20%) 9 3 (W.3) 20X5 *($20 000 20%) +($20 000 20% /12) +($24 000 20% /12)+ (W.4) Total depreciation on machine sold For 20X3 $20 000 20% For 20X4 $20 000 20% 9 For 20X5 $20 000 20% /12

QUESTION 9
(a) 20X8 Jul 01 Oct 01 Oct 01 (b) 20X9 Mar 31 Jun 30 Balance b/f Bank ($20 000 25%) Ken Nicolson Motor vehicles at cost $ 20X9 180 000 Mar 31 5 000 Jun 30 _15 000 200 000 Vehicle Disposal Balance c/d $ 16 000 184 000 ______ 200 000 $ 60 000 53 696 113 696

Provision for depreciation Account- Motor vehicles $ 20X8 Vehicle Disposal (6 400 + 3 840) 10 240 Jul 01 Balance b/f Balance c/d 103 456 20X9 ______ Jun 30 Income statement (W 2) 113 696 Motor vehicles disposal Account $ 16 000 _____ 16 000

(c) 20X9 Mar 31

Motor vehicles account

20X9 Mar 31 Mar 31 Mar 31

Provision for Depreciation Wilson & Wilson Income statement (loss)

$ 10 240 5 400 360 16 000

(d)

Income Statement (extract) For the year ended 30 June 20X9 $ $ xx xxx

Gross profit Less Expenses: Depreciation Loss on vehicle disposal (e) Non-Current Assets Motor vehicles Balance Sheet (extract) as at 30 June 20X9 $ 184 000 53 696 360

Provision for Depreciation WORKINGS (W 1) Calculation of depreciation on vehicle sold Purchase price 1 July 20X6 Depreciation for the year to 30 June 20X7 ($16 000 40%) Depreciation for the year to 30 June 20X8 ($9 600 40%) (W 2) Depreciation charge for the year ended 30 June 20X8 *($184 000 ($60 000 $10 240)+ 40% = $53 696

(103 456)

80 544 $ 16 000 (6 400) 9 600 (3 840)

QUESTION 10
(a) 20X5 Jan 01 July 01 Balance b/f Bank ($8 000 20%) Asif enterprises Office Equipment at cost $ 20X5 110 000 Apr 01 1 600 Dec 31 _ 6 400 118 000 104 000 Equipment Disposal Balance c/d $ 14 000 104 000 ______ 118 000

20X6 Jan 01 (b) 20X5 Apr 01 Dec 31

Balance b/d

Provision for depreciation Account- Office Equipment $ 20X5 Equipment disposal (W 1) 4 375 Jan 01 Balance b/f Balance c/d 51 500 Dec 31 Income statement (W 2) 55 875 20X6 Jan 01 Balance b/d Office Equipment disposal Account $ 20X5 14 000 Apr 01 875 Apr 30 14 875

$ 30 000 25 875 55 875 51 500

(c) 20X5 Apr 30

Office Equipment account Income statement (profit)

Provision for Depreciation ABC and Co

$ 4 375 10 500 14 875

(d)

Income Statement (extract) For the year ended 31 December 20X5 $ $ xx xxx 875 (25 875) Balance Sheet (extract) As at 31 December 20X5 $ 104 000 51 500 $ 52 500

Gross profit Add Other Incomes: Profit on equipment disposal Less Expenses: Depreciation (e) Non-Current Assets Office Equipment Provision for Depreciation WORKINGS (W 1) Calculation of provision for depreciation on equipment sold Purchase price 1 January 20X4 Depreciation for the year to 31 December 20X4 ($14 000 25%) 3 Depreciation for the year to 31 December 20X5 ($14 000 25% /12) Total depreciation on equipment sold (W 2) Depreciation charge for the year ended 31 December 20X5 3 6 *($110 000 $14 000) 25%+ + ($14 000 25% /12) + ($8 000 25% /12) = $25 875 $ 14 000 3 500 875 4 375