PART BState which depreciation method will be the most appropriate in the case of each of the followingassets.A delivery van used by a baker.A filing cabinet.A shop held on a twenty-year lease.A plastic moulding machine to manufacture a new novelty – plastic fireguards. It is(i)(ii)(iii)(iv)expected that these will be very popular next Christmas and that sales will continue for ayear or two thereafter but at a very much lower level.Machine X. This machine is used as a standby when the normal machines are beingmaintained. Occasionally it is used to increase capacity when there is a glut of orders.Machine X is of an old type and is inefficient compared with new machines. When usedon a full-time basis, the machine should last approximately four years.(v)

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State which depreciation method will be the most appropriate in the case of each of the following assets. A delivery van used by a baker. A filing cabinet. A shop held on a twenty-year lease. (i) (ii) (iii)

State which depreciation method will be the most appropriate in the case of each of the following assets. A delivery van used by a baker. A filing cabinet. A shop held on a twenty-year lease. (i) (ii) (iii)

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

PART B
State which depreciation method will be the most appropriate in the case of each of the following
assets.
A delivery van used by a baker.
A filing cabinet.
A shop held on a twenty-year lease.
A plastic moulding machine to manufacture a new novelty – plastic fireguards. It is
(i)
(ii)
(iii)
(iv)
expected that these will be very popular next Christmas and that sales will continue for a
year or two thereafter but at a very much lower level.
Machine X. This machine is used as a standby when the normal machines are being
maintained. Occasionally it is used to increase capacity when there is a glut of orders.
Machine X is of an old type and is inefficient compared with new machines. When used
on a full-time basis, the machine should last approximately four years.
(v)

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