A On 1 January 2011 a business purchased a laser printer costing £1,800. The printer has an estimated life of four years after which it will have no residual value. It is expected that the output from the printer will be:

Required:

(a) Calculate the annual depreciation charges for 2011, 2012, 2013 and 2014 on the laser printer on the following bases: (i) the straight line basis, (ii) the diminishing balance method at 60 per cent per annum, and (iii) the units of output method. Note: Your workings should be to the nearest £.

(b) Suppose that in 2014 the laser printer were to be sold on 1 July for £200 and that the business had chosen to depreciate it at 60 per cent per annum using the diminishing balance method applied on a month for month basis. Reconstruct the following accounts for 2014 only: (i) the Laser Printer account, (ii) the Provision for Depreciation – Laser Printer account, and (iii) the Assets Disposals account.

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Year 2011 2012 2013 2014 Sheets printed 35,000 45,000 45,000 55,000 180,000