5.16 Valda runs a marketing agency. She prepares her own accounts and is currently working on the income statement and statement of financial position at 31 December 2012. She purchased the freehold of a small office building on 1 January 2007 for £364 000. 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 which were purchased several years ago for £16 777. The fixtures and fittings are now fully depreciated.

Also, the business owns two cars which are used for staff visiting client. One car was bought in the accounting year ending 31 December 2009 for £15 300 and the other in 2010 for £17 660. Valda depreciates the cars on a straight-line basis over their estimated useful lives of 4 years. Both cars have an estimated residual value of £5000.

a) Calculate the total depreciation charge to Valda’s income statement in respect of depreciation for the year ending 31 December 2012.

b) Show how non-current assets will be presented in Valda’s statement of financial position at 31 December 2012.