9.8A Valda runs a marketing agency. She prepares her own accounts and is currently working on the profit and loss and balance sheet at 31 December 20X7. She purchased the freehold of a small office building on 1 January 20X2 for £364000. The land value included in the purchase price is estimated at £50 000. Valda depreciates the buildings element of the freehold over 100 years, the expected useful life of the building.

Apart from the building, Valda's business owns fixtures and fittings that were purchased several years ago for £16 777. The fixtures and fittings are now fully depreciated. Also, the business owns two cars used for staff visiting clients. One car was bought in the accounting year ending 31 December 20X5 for £15 300 and the other in 20X6 for £17 660. Valda depreciates the cars on a straight-line basis over their estimated useful lives of four years. Both cars have an estimated residual value of £5000.

a) Calculate the total depreciation charge to Valda's profit and loss account in respect of depreciation for the year ending 31 December 20X7.

b) Show how fixed assets will be presented in Valda's balance sheet at 31 December 20X7.
9.9Wilma runs a wedding car service. Business is expanding and she is planning to buy a new vehicle. The basic list price of a new car is £24400, but Wilma must pay an additional £800 for it to be sprayed white. She purchases the car on 1 March in time for the main spring and summer wedding season. Her year-end is 28 February. Wilma depreciates cars on the reducing balance basis at 15% per annum.
What will be the depreciation charge for the first year of ownership of the new car?

a) £3 660

b) £3 780

c) £3 540

d) £4460.