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Frank Trading is an accessory wholesale company. The

Frank Trading is an accessory wholesale company. The

FINANCIAL ACCOUNTING
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 3 Frank Trading is an accessory wholesale company. The year end is of 31 December of that year. The motor vehicles bought for the use in the business are as follows: Date of Purchase 2nd April 2018 11th February 2019 Registration Number WXY 7822 WYE 5512 REQUIRED: a) Using the straight line basis for depreciation: i) Show the calculation of the depreciation. ii) Motor Vehicles Account. iii) Accumulated Depreciation Account. Cost (S) 14,000 The firm provides for depreciation of its motor vehicles at the rate of 20% per annum on straight line basis, with no residual value. A full year's depreciation is provided for motor vehicles bought before 1 July of that year. c) Discuss reasons of Accumulated (provision) depreciation. 16,000 b) Using the reducing balance basis for depreciation at the rate of 25% per annum: i) Show the calculation of the depreciation. ii) Accumulated Depreciation Account.
Transcribed Image Text:QUESTION 3 Frank Trading is an accessory wholesale company. The year end is of 31 December of that year. The motor vehicles bought for the use in the business are as follows: Date of Purchase 2nd April 2018 11th February 2019 Registration Number WXY 7822 WYE 5512 REQUIRED: a) Using the straight line basis for depreciation: i) Show the calculation of the depreciation. ii) Motor Vehicles Account. iii) Accumulated Depreciation Account. Cost (S) 14,000 The firm provides for depreciation of its motor vehicles at the rate of 20% per annum on straight line basis, with no residual value. A full year's depreciation is provided for motor vehicles bought before 1 July of that year. c) Discuss reasons of Accumulated (provision) depreciation. 16,000 b) Using the reducing balance basis for depreciation at the rate of 25% per annum: i) Show the calculation of the depreciation. ii) Accumulated Depreciation Account.
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