Use the Balance Sheet Approach to calculate the deferred tax which is applicable to each item fromthe date of purchase and in addition prepare the Property, Plant and Equipment Note for SunriseLimited for the year ended 31 December 2016.
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.
Sunrise Limited purchased a helicopter for R4 500 000 at a residual value of R150 000 on 30 June 2015.The helicopter is
Use the
Step by step
Solved in 2 steps
