(a) Explain the three causes of depreciation. [3 marks]

(b) A company maintains its non-current assets at cost. Depreciation provision accounts for each asset are kept. At 31 December 2010 the position was as follows:

Assets	Total cost to date	Total depreciation to date
Machinery	94,500,000	28,350,000
Office furniture	3,200,000	1,280,000

Additional information:

They added machinery worth 16,000,000 and office furniture of 460,000.

A machine bought in 2007 for RWF 1,600,000 was sold for 360,000/- during the year.

Rates of depreciation are:

Machinery 10%

Furniture 10%

Required:

Using reducing balance method, extract depreciation schedule and state the value of assets and depreciation expenses for the year ended 31 Dec. 2011. [12 marks]