Accounting - Depreciation

What is depreciation?

• Assets, such as vehicles and equipment, decrease in value over time as a result of wear and tear. This is expressed in a value which is known as depreciation

• Depreciation is a liability and it is calculated each month

• Depreciation is expressed as a value to indicate the the increase in the value of Assets

What is the formula for straight line method

• CV x depreciation rate

• (CP - Acc Depre) x depreciation rate

• CP x Depreciation rate

• 

What is the formula for diminishing balance method

• (CV - Acc depr) x Depreciation rate

• Selling price x Depre rate

• CP x Depreciation rate

• 

Cost of vehicle - 45 000

deprecation rate - 6%

Vehicle was bough on the 1 May 2020

Calculate the depreciation for year end 28 Feb 2021 using straight line

• 2250

• 22500

• 2700

• 

Cost of vehicle - 40 000

deprecation amount 4000

The company uses a straight line method

Accumulated depreciation - 15 000

Calculate the depreciation rate?

• 10%

• 37.5%

• 15%

Cost of vehicle - 50 000

deprecation rate - 9%

Accumulated depreciation - 15000

Calculate the depreciation for year end 28 Feb 2021 using diminishing balance method

• 4500

• 4250

• 3150

• 

CP - 26 000

Acc depre - 6500

Dep - 1560

depreciation rate - 6%

Calculate carrying value

• 1560

• 24440

• 19500

• 0

Last years end of year CV is the new years beginning CV?

True or false

• True

• False

• what is ma`am asking?

•