Question
Tokyo Ltd has two types of equipment. The management decided that different depreciation methods should be applied in determining the annual depreciation charges. Information on
Tokyo Ltd has two types of equipment. The management decided that different depreciation methods should be applied in determining the annual depreciation charges. Information on the equipment is summarised as follows (ignore GST).
| Equipment Type | Date Acquired | Cost | Residual Value | Depreciation Rate (Annually) | Depreciation Method |
| A | 1 July 2018 | 286 200 | 30 000 | 25% | Diminishing balance |
| B | 1 January 2021 | 130 000 | 5 000 | 20% | Straight-line |
Required:
- Assuming the depreciation is recorded to the nearest month, calculate the depreciation charges for the year ended 30 June 2021.
(10 marks)
- Prepare the journal entries for the year ended 30 June 2021
(4 marks)
- Explain the factors causing a depreciable asset to have a limited useful life
(6 marks)
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Fia Foundations Of Financial Accounting Ffa Interactive Text
Authors: BPP Learning Media
1st Edition
1509724176, 978-1509724178
