Depreciation

Which of the following best describes depreciation?

• a fall in value of non-current asset

• the current economic value of non-current asset

• the allocation of the cost of non-current asset over its useful life

• the portion of the non-current asset used up

Which entry below records depreciation expense?

• Debit: Depreciation expense

  Credit:

  Accumulated depreciation

• Debit: Depreciation expenses

  Credit:

  Non-current asset

• Debit:

  Accumulated depreciation

  Credit

  Non-current asset

• Debit:

  Depreciation expense

  Credit

  Income Summary

Jack bought motor vehicle, $40 000, on 1 May 2021. He depreciated it at 15% per annum on cost. What is the depreciation expense for the year ended 31 December 2021?

Marilyn bought office equipment, $6000, on 1 August 2021. She depreciated it at 30% per annum on book value. Calculate depreciation expense for year ended 30 Sep 2021 and 2022.

Truman owned office equipment costing $40 000 on 1 Jan 2022. The accumulated depreciation on these equipment was $15 000 on the same date.

On 1 May 2022, Truman bought another equipment costing $6000.

Truman depreciates equipment at 20% per annum on cost.

Calculate depreciation expense, accumulated depreciation and net book value for the financial year ended 31 December 2022.

Hornbill's books on 1 July 2022 showed the following:

Motor vehicles (cost) $100 000

Accumulated depreciation on motor vehicles $32 000

On 1 April 2023, Hornbill bought a car for his manager, $54 000.

Given that Hornbill depreciates his motor vehicles at 20% per annum using reducing balance method, state the depreciation expense for the year ended 30 June 2023 and the accumulated depreciation and net book value of motor vehicles on 30 June 2023.

The statement of financial position on 30 April 2022 showed fixtures and fittings, $48 000 (cost) and accumulated depreciation of $28 600.

On 1 July 2022, the business bought new fixtures and fittings, $14 200.

The business depreciates fixtures and fittings at 20% per annum on net book value and charges a full year depreciation in the year of purchase.

Calculate depreciation expense, accumulated depreciation and net book value as at 30 April 2023.