Provide for depreciation as follows :On motor vehicles :15% per annum on reducing balance method.On equipment :10% on cost. Note new piece of equipment was purchased on 1 September 2019 costing 54 000. StrikeoutTypewriter NoteQuickPDFU UnderlineSign-Convert ProtectScanCommentFol.Debit (R)Credit (R)Statement of financial position sectionCapitalB1500 000.00Drawings8225 000.00Land and buildingsB3865 000.00VehiclesB4220 987.00EquipmentB5156 760.00Accumulated depreciation: EquipmentB654 320.00(1 April 2019)Accumulated Depreciation: VehiclesB722 580.00(1 April 2019)BankB822 430.00Debtors ControlB935 600.00Allowance for Credit Losses- 1 April 2019B101 780.25Petty CashB111378.98В1227 865.43Trading inventory (1 April 2019)В13287 650.00Mortgage LoanB1431 420.00Creditors ControlB1523 290.65SARS(UIF/SDL/PAYE)O The Independent Institute of Education (Pty) Ltd 2020Page S of 25/7

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Description: Provide for depreciation as follows :On motor vehicles :15% per annum on reducing balance method.On equipment :10% on cost. Note new piece of equipment was purchased on 1 September 2019 costing 54 000. StrikeoutTypewriter NoteQuickPDFU UnderlineSign-

Depreciation is Decrease in the Value of Asset due to use and Wear and Tear. Depreciation Expense is…

Business

Accounting

rovide for depreciation as follows : On motor vehicles :15% per annum on reducing balance method. On equipment :10% on cost. Note new piece of equipment was purchased on 1 September 2019 costing 54 000.

rovide for depreciation as follows : On motor vehicles :15% per annum on reducing balance method. On equipment :10% on cost. Note new piece of equipment was purchased on 1 September 2019 costing 54 000.

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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Concept explainers

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.

Topic Video

Question

Provide for depreciation as follows :

On motor vehicles :15% per annum on reducing balance method.

On equipment :10% on cost. Note new piece of equipment was purchased on 1 September 2019 costing 54 000.

Strikeout
Typewriter Note
Quick
PDF
U Underline
Sign-
Convert Protect
Scan
Comment
Fol.
Debit (R)
Credit (R)
Statement of financial position section
Capital
B1
500 000.00
Drawings
82
25 000.00
Land and buildings
B3
865 000.00
Vehicles
B4
220 987.00
Equipment
B5
156 760.00
Accumulated depreciation: Equipment
B6
54 320.00
(1 April 2019)
Accumulated Depreciation: Vehicles
B7
22 580.00
(1 April 2019)
Bank
B8
22 430.00
Debtors Control
B9
35 600.00
Allowance for Credit Losses- 1 April 2019
B10
1 780.25
Petty Cash
B11
1378.98
В12
27 865.43
Trading inventory (1 April 2019)
В13
287 650.00
Mortgage Loan
B14
31 420.00
Creditors Control
B15
23 290.65
SARS(UIF/SDL/PAYE)
O The Independent Institute of Education (Pty) Ltd 2020
Page S of 2
5/7

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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