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Please help in depreciation queries!!

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CAN ANYBODY HELP ME WITH THE RIGHT ANSWER :

1. Books of Ekta, shows on 1st January 2006 furniture20,000. During the year a part of the furniture whose book value on 1st January 2006 is1,200 has been exchanged with another furniture by paying additional500. Ekta charge depreciation @ 10% p.a. The net amount of the furniture to be shown in the balance sheet will be?

2.On 1.1.2005, a machine costing10,000 and a piece of furniture costing20,000 was purchased. Depreciation is provided @ 5% on furniture and 10% per annum on machine. The depreciation for the year ended 31st March, 2005 should be?

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10 Replies

Rachit Singhal (CA FINAL) (68 Points)
Replied 26 March 2011

Your first question is not clear

Ans for 2nd question is Rs.500.00

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Angad kr kannaujiya (Studant) (169 Points)
Replied 26 March 2011

Opening WDV 20000 Add- Duering the year 1700 Total- 21700 Less- sale duering the year 1200 Total-WDV of the book 20500 less- depreciation 1880+170= 2050 WDV AS ON ... 18450 if assets purchase after 2 oct. 50% of normal rate . Depreciatopn 20000-1200=18800*10%=1880 purchase 1700*10%=170

(Guest)

thanks angad and rachit

Ashish Jain (.Net Developer) (641 Points)
Replied 27 March 2011

20000-1200 = 18800

18800+1700 = 20500

20500*10% = 2050

20500-2050 = 18450

Future CA (Student) (58 Points)
Replied 27 March 2011

It is assumed that the furniture was exchanged in the middle of the year and book of a/c's are closed on 31st December

value of furniture on 1 jan 06 = 20,000
on 20,000 full year depreciation will be charged @ 10% = 20000 * 10% = 2000
on 500 depreciation will be charged for half year @ 10% = 500 * 10% * 6/12 = 25

total depreciation charged for the year = 2000 + 25 = 2025

value of furniture to be shown in the BS = value of furniture on 1 jan 06 + additional value paid for exchange - depreciation charged for the year = (20000 + 500) - 2025

So,value of furniture to be shown in the Balance Sheet will be 18475

2.

value of machine on 1.1.05 = 10,000
Depreciation on Machine = 10,000 * 10% * 3/12 = 250

valu of furniture on 1.1.05 = 20,000
Depreciation on Furniture = 20,000 * 5% * 3/12 = 250

Depreciation for the year ended 31.3.05 = 250 + 250 = 500

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Ritesh Indian Son[CMA*CS*CA] (" Simple Living High Thinking ") (4117 Points)
Replied 27 March 2011

Originally posted by : Future CA
	1. It is assumed that the furniture was exchanged in the middle of the year and book of a/c's are closed on 31st December value of furniture on 1 jan 06 = 20,000 on 20,000 full year depreciation will be charged @ 10% = 20000 * 10% = 2000 on 500 depreciation will be charged for half year @ 10% = 500 * 10% * 6/12 = 25 total depreciation charged for the year = 2000 + 25 = 2025 value of furniture to be shown in the BS = value of furniture on 1 jan 06 + additional value paid for exchange - depreciation charged for the year = (20000 + 500) - 2025 So,value of furniture to be shown in the Balance Sheet will be 18475 2. value of machine on 1.1.05 = 10,000 Depreciation on Machine = 10,000 * 10% * 3/12 = 250 valu of furniture on 1.1.05 = 20,000 Depreciation on Furniture = 20,000 * 5% * 3/12 = 250 Depreciation for the year ended 31.3.05 = 250 + 250 = 500

Correct....

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 27 March 2011

Originally posted by : Future CA
	1. It is assumed that the furniture was exchanged in the middle of the year and book of a/c's are closed on 31st December value of furniture on 1 jan 06 = 20,000 on 20,000 full year depreciation will be charged @ 10% = 20000 * 10% = 2000 on 500 depreciation will be charged for half year @ 10% = 500 * 10% * 6/12 = 25 total depreciation charged for the year = 2000 + 25 = 2025 value of furniture to be shown in the BS = value of furniture on 1 jan 06 + additional value paid for exchange - depreciation charged for the year = (20000 + 500) - 2025 So,value of furniture to be shown in the Balance Sheet will be 18475 2. value of machine on 1.1.05 = 10,000 Depreciation on Machine = 10,000 * 10% * 3/12 = 250 valu of furniture on 1.1.05 = 20,000 Depreciation on Furniture = 20,000 * 5% * 3/12 = 250 Depreciation for the year ended 31.3.05 = 250 + 250 = 500

in 2 depreciation would be claimed for 6 months, as there is no provision to claim depriciaion for actual period of use, but in two half yearly segments are provided for this purpuse, 1) upto 30 sept and 2) after 30th sept.

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