Populate the Depreciation Schedule below abased in the following transactions and calculate the total decline in value or any balancing adjustment for the period. Note, the client wishes to maximize their decline in value deduction in the current FY 2022-23 Desktop computer cost $2,600. Acquire 11 Oct 2022. Effective life 4 years Motor vehicle cost $17,000. Acquire 1 May 2023. Effective life 6 years. Used approximately 80% for income-producing purposes Computer software cost $1,100. Acquire 15 Oct 2022. Effective 5 years Color photocopier cost $800. Acquire 19 Dec 2022. Effective life 8 years. Sold on 8 June for $700
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.
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Desktop computer cost $2,600. Acquire 11 Oct 2022. Effective life 4 years
Motor vehicle cost $17,000. Acquire 1 May 2023. Effective life 6 years. Used approximately 80% for income-producing purposes
Computer software cost $1,100. Acquire 15 Oct 2022. Effective 5 years
Color photocopier cost $800. Acquire 19 Dec 2022. Effective life 8 years. Sold on 8 June for $700
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