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Question 1: Calculating depreciation on vehicles: Two vehicle has an estimated useful life of 12 years in the company after which it can be resold

Question 1: Calculating depreciation on vehicles: Two vehicle has an estimated useful life of 12 years in the company after which it can be resold for an estimated 10% of its original cost.

Vehicle 1: The average replacement cost of a heavy goods vehicle is presently 120,000

Vehicle 2: The average replacement cost of other vehicles is 24,000 per vehicle.

You are responsible for the cost of depreciation on these vehicles. Depreciation is to be charged at current replacement cost.

Question 2: The depot and office which you occupy have a current replacement cost of 3,500,000 and a useful life of 50 years. The land which they occupy has a current resale value of 600,000 and the scrap value of the building materials is estimated at 100,000 at current prices. You are required to budget for depreciation on the buildings on a straight-line basis.

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