Compu Ltd purchased an asset worth 25,000. Useful life=10 years Residual value=1,000 Accounts of the company was closed on 31st December every year. Compu Ltd follows straight line depreciation method annually. Find out rate of depreciation and provide journal entries for the first 2 years.

Compu Ltd purchased an asset worth 25,000. Useful life=10 years Residual value=1,000 Accounts of the company was closed on 31st December every year. Compu Ltd follows straight line depreciation method annually. Find out rate of depreciation and provide journal entries for the first 2 years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Compu Ltd purchased an asset worth 25,000.

Useful life=10 years

Residual value=1,000

Accounts of the company was closed on 31st December every year. Compu Ltd follows straight line depreciation method annually.

Find out rate of depreciation and provide journal entries for the first 2 years.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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