Question 3 Straight Line Depreciation 25 marks

On 1 April. 2018, the Hamilton Furniture Ltd had bought a large outdoor table for $ 10,500. The useful life of the table is 10 years. The residual value after 10 years is $500. Hamilton Furniture Limited uses the straight line depreciation method to depreciate the outdoor table.

Required:

1. Calculate the depreciation for the years ending on 31 March 2019, 31 March 2020 and 31 March 2021

Note: Use the formula given at the end of the question paper.

9 marks

2. Calculate the carrying amount for the outdoor table for the years 2020 and 2021.

7 marks

3. Show how the depreciation expense for the 2020 would be analysed in the income statement.

3 marks

4. Show how the accumulated depreciation for the years 2020 and 2021 would be recognised under non-current assets. 6 marks