Example 1 Sha Trading bought a motor vehicle on 1 January 2018 for RM32,000 by cheque. The motor vehicle is estimated to last for 5 years and its residual value is RM2,000. The accounting year end of the company is at 31 December. a. Using the straight line method, calculate the depreciation expense. b. Record the transaction for the year ended 31 December 2018 and 2019 a full year's depreciation is charged in the year of purchase. Suggested answer: (RM32,000 - RM2,000) / 5 RM6,000 a. Annual depreciation

Example 1 Sha Trading bought a motor vehicle on 1 January 2018 for RM32,000 by cheque. The motor vehicle is estimated to last for 5 years and its residual value is RM2,000. The accounting year end of the company is at 31 December. a. Using the straight line method, calculate the depreciation expense. b. Record the transaction for the year ended 31 December 2018 and 2019 a full year's depreciation is charged in the year of purchase. Suggested answer: (RM32,000 - RM2,000) / 5 RM6,000 a. Annual depreciation

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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