The second half is the depreciation.
With the example given, we will start with Plant and machinery. The net book value was 78400 so we add the purchases nca of 50,000 to get 128400 x 25% = 32100. This will be the amount of depreciation charge for the year.
The charge for the year for fixtures and fittings is simply: 110,000 x 15% = 16500
In this column, an asset was sold costing 20,000. We need to take out the cost and the provision for depreciation out of the accounts.
Looking at the information, we work out the provision is for 2 years.
cost x % x 2 will give us the charge, so 20,000 x 15% = 3000 x 2 = 6000.
The 6000 depreciation will be eliminated on disposal.
Land and buildings: 620,000 x 2% = 12,400.
The end of the section is Net book value at the end of the year.
Comments
No comments have yet been made