1.3. Accounting for non-current assets
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 480 questions
Helen Ossetia provides the following information for the year ended 31 May 2013. Non-current assets Buildings Machinery Motor vehicles Total $000 $000 $000 $000 Cost Accumulated depreciation at 31 May 2013 (120) (800) (300) (1220) Net Book Value Depreciation charge for the year A full year’s depreciation is charged in the year of purchase and no depreciation is charged in the year of disposal. Buildings and machinery are depreciated using the straight line method. Motor vehicles are depreciated using the reducing balance method. REQUIRED Explain why Helen needs to depreciate her non-current assets. State three causes of depreciation of motor vehicles. Calculate the rate of depreciation used by Helen at 31 May 2013 to depreciate each class of non-current asset. Explain why machinery is usually depreciated using the straight line method while motor vehicles are usually depreciated using the reducing balance method. Additional information During the year ended 31 May 2014: Helen bought new machinery costing $720 000 and sold old machinery which had cost $160 000. The old machinery had been bought on 1 December 2011. Helen bought a new motor vehicle. She traded in an old vehicle valued at $40 000 and paid the balance of $160 000, by cheque. The trade in vehicle had cost $100 000 and had a net book value of $60 000 at the date of disposal. A new building costing $1 000 000 was completed during the year. REQUIRED Complete the non-current asset schedule below for the year ended 31 May 2014. Buildings Machinery Motor vehicles Total $000 $000 $000 $000 COST Balance at 31 May 2013 Additions Disposals Balance at 31 May 2014 DEPRECIATION Balance at 31 May 2013 Charge for the year Disposals Balance at 31 May 2014 NBV at 31 May 2014 NBV at 31 May 2013
9706_s14_qp_23
THEORY
2014
Paper 2, Variant 3
View
A business depreciates its non-current assets at 20% using the straight-line method. Depreciation is calculated on a time basis in the year of acquisition and disposal. $ non-current assets, at cost, 31 December 2013 200 000 purchase of machinery 1 January 2014 50 000 disposal of machinery 30 September 2014 40 000 non-current assets, at cost, 31 December 2014 210 000 What is the depreciation charge for non-current assets for the year ended 31 December 2014?
9706_s15_qp_12
MCQ
2015
Paper 1, Variant 2
View
Questions Discovered
480