Assume that motor vehicle purchased for RM 80,000 on January 2015 and depreciated at 20% per year using reducing balance. b) Prepare i) Motor Vehicle Account ii) Statement of Comprehensive Income for the year ended 31 Dec 2018 iii) Accumulated Depreciation Account
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Assume that motor vehicle purchased for RM 80,000 on January 2015 and
per year using reducing balance.
b) Prepare
i) Motor Vehicle Account
ii) Statement of Comprehensive Income for the year ended 31 Dec 2018
iii)
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