Q1. BabyJet Ltd has acquired permit to run local airline in Ghana and is in the process of acquiring it's fleet of aircrafts. You have been hired as the accountant and you are required to establish a depreciation process for the aircrafts. You have been given details of one aircraft as follows: The total outright cost (including delivery and other charges) $ 5.5 Million. This cost is further divided into three: 1. Cost of fuselage $ 3 million (30 years useful life) 2. Engines and related parts $ 2 million (10 year useful life) 3. Remaining ancillary parts $ 0.5 million ( 5 years useful life). Required: Calculate depreciation for the aircraft costing $ 5.5 million, assuming no salvage value. Give a reason for your basis of calculation (mot more than two sentences) YUPSA SERVICE ACCOUNTING AND FINANCE Question 2. Kwame Enterprise purchased equipment several years ago costing GHS 250,000. The equipment had an estimated useful economic life of 20 years with a negligible salvage value. The asset which has been a use for the past 15 years was disposed of at the beginning of the current year for cash of GHS 70000. Required: Show how the above equipment will be treated in the books of Kwame enterprise with relevant calculations. Hint: Asset is depreciated for 15 years only. No need to calculate depreciation for each year (cumulative amount is ok). Q3. Sabali Ventures is an SME which has been operating for many years. You have recently joined the business and given responsibility for finance. The books of Sabali ventures shows an asset at cost of GHS 15,000 and accumulated depreciation of GHS 9000. You are told the remaining life of the asset is four (4) years and that depreciation has always been calculated on a straight line on this asset. The business spent GHS 3000 to improve the efficiency of this asset in the beginning of the current year and it is believed this will extend the useful life of the asset by three more years. The improvement costs qualifies for capitalisation under relevant accounting standards. Required: Calculate depreciation on the improved fixed asset for the next two (2) years, indicating the impact on the income statement as well as financial position. Q4. Zabzugu enterprise purchased office furniture on 1st January 2010 for GHS 64,000. This is expected to be in use for the next 10 years and can be sold for no less than GHS 4000 after the 10 years. The business bought another office furniture on 1st July 2012 for GHS 25,000 due to expansion of its premises and the recently acquired furniture will have no salvage value but is also expected to last 10 years. Required: Show depreciation and NBV of the assets for the years 2010 to 2013