Purchase Price of Machine= $ 800,000 Registration charges = $ 50,000 Commission paid on purchase = $10.000 Insurance Charges = $20,000 Life of Asset = 10 years Required: a) Calculate Depreciation per year b)On 1st April 2016, X Ltd purchased machine costing $ 500.000. He paid $40,000 as commission on purchase. On 1st July 2017 machine was installed and paid Rs 100,000 as installation charges. Calculate depreciation for the year ended on 31st December 2016 and 2017. If rate of depreciation is 10% by WDV method. cJK Co. bought a heavy duty machinery for its production process on July 1, 2008 at a price of $ 200,000 with credit terms of 2/10.30 and paid the amount due on 9th July 2008. In order to purchase this machinery, JK has to incur the following additional expenses on1st July 2008. Sales tax 15 % Freight charges 25.000 Transportation from railway to the JK Factory 3,000 Installation charges 8,000 It is the company policy to depreciate the machinery over the 10 years. This machine has a scrape value of S 10.000. Straight line method of depreciation is to be used for charging the depreciation. JK closes its accounting year on December 31 each year. Required a) Calculate the cost of the machine. b) Calculate the annual depreciation expenses for December 31. 2008, 2009 & 2010,
Purchase Price of Machine= $ 800,000 Registration charges = $ 50,000 Commission paid on purchase = $10.000 Insurance Charges = $20,000 Life of Asset = 10 years Required: a) Calculate Depreciation per year b)On 1st April 2016, X Ltd purchased machine costing $ 500.000. He paid $40,000 as commission on purchase. On 1st July 2017 machine was installed and paid Rs 100,000 as installation charges. Calculate depreciation for the year ended on 31st December 2016 and 2017. If rate of depreciation is 10% by WDV method. cJK Co. bought a heavy duty machinery for its production process on July 1, 2008 at a price of $ 200,000 with credit terms of 2/10.30 and paid the amount due on 9th July 2008. In order to purchase this machinery, JK has to incur the following additional expenses on1st July 2008. Sales tax 15 % Freight charges 25.000 Transportation from railway to the JK Factory 3,000 Installation charges 8,000 It is the company policy to depreciate the machinery over the 10 years. This machine has a scrape value of S 10.000. Straight line method of depreciation is to be used for charging the depreciation. JK closes its accounting year on December 31 each year. Required a) Calculate the cost of the machine. b) Calculate the annual depreciation expenses for December 31. 2008, 2009 & 2010,
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Purchase Price of Machine= $ 800,000
Registration charges = $ 50,000
Commission paid on purchase = $10.000
Insurance Charges = $20,000
Life of Asset = 10 years
Required:
a) Calculate Depreciation per year
b)On 1st April 2016, X Ltd purchased machine costing $ 500.000. He paid $40,000 as commission on purchase. On 1st July 2017 machine was installed
and paid Rs 100,000 as installation charges. Calculate depreciation for the year ended on 31st December 2016 and 2017. If rate of depreciation is 10%
by WDV method.
cJK Co. bought a heavy duty machinery for its production process on July 1, 2008 at a price of $ 200,000 with credit terms of 2/10.30 and paid the
amount due on 9th July 2008. In order to purchase this machinery, JK has to incur the following additional expenses on1st July 2008.
Sales tax 15 %
Freight charges 25.000
Transportation from railway to the JK Factory 3,000
Installation charges 8,000
It is the company policy to depreciate the machinery over the 10 years. This machine has a scrape value of S 10.000. Straight line method of
depreciation is to be used for charging the depreciation. JK closes its accounting year on December 31 each year.
Required
a) Calculate the cost of the machine.
b) Calculate the annual depreciation expenses for December 31. 2008, 2009 & 2010,
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