Depreciation Extra Exercises

QUESTION ONE

Fruitful Ltd bought a fruit sorting machine for $63,500 on 1 February 2005. The company is using diminishing value depreciation at 25%.

Required:

Show the relevant Balance Sheet extract for the year ended 30 September 2007 (use whole dollars only).

QUESTION TWO

Blueberry Ltd sells gourmet pies. At 30 September 2006 the Balance Sheet revealed the following:

Equipment 32 000 Accumulated Depreciation 14 000 18 000 Fixtures and Fittings 3,200 Accumulated Depreciation 640 2,560

The firms policy is to depreciate equipment at 25% diminishing value.

The fixtures and fittings are depreciated over 10 years straight line with no residual value.

Required: Show the relevant Income Statement and Balance Sheet extracts for the year ended 30 September 2007.