Question

Question 3 Test Bank: 01 Sep 19 Florence prepares the company year end accounts on 31" December annually. The following transactions occurred during the year 2017: Date of Assets Useful life Percentage Disposal Cost (RM) purchase (year) for Value depreciation (RM) 1-7-2014 Motor Vehicles 100,500 1-1-2014 Equipment 142,000 1-1-2014 Labelling 10% 65,000 Machine 10 The company uses: iv) straight line method of depreciation for motor vehicles and equipment. v) reducing balance method for labelling machine with the rate 10% vi) The company implement month to month basis of depreciation. (Depreciation is calculated based on number of month the assets exist in the business) All payments and receipts for the above transactions were made through cheque/bank. You are required to prepare: c) Depreciation schedule for motor vehicles, equipment and labelling machine from year of purchase until 31 December 2017. (10 m) d) Prepare the non current assets section in statement of financial position (5 m)

Answer 1

a) Depreciation schedule for the year ended December 31, 2017
Date of purchase	Assets	Cost (RM)	Useful life (years)	Rate of depreciation	No. of months used till 31 Decemebr 16	Depreciation method	Depreciation till 31 Dec 16	Current year depreciation (January 16 to December 17)	Accumulated depreciation till 31 Dec 17
01-Jul-14	Motor vehicles	100500	10	10%	30	SLM	25125	10050	65325
01-Jan-14	Equipment	142000	8	12.5%	36	SLM	53250	17750	71000
01-Jan-14	Labelling Machine	65000		10%		WDV	17615	4739	42647
		307500							178972
Depreciaiton on Labelling Machine		RM
01-Jan-14	Cost	65000
	Less: Depreciation @ 10% for CY 2014	6500
	WDV as on 31 Dec 14	58500
	Less: Depreciation @ 10% for CY 2015	5850
	WDV as on 31 Dec 15	52650
	Less: Depreciation @ 10% for CY 2016	5265
	WDV as on 31 Dec 16	47385
	Less: Depreciation @ 10% for CY 2017	4739
	WDV as on 31 Dec 17	42647
	Net fixed assets are = Gross block - accumulated depreciaiton = RM 307500 - RM 178972 = RM 128528
b) Extract of statement of financial position		`RM
ASSETS
Non current Assets
Property, plant ad equipment (net)		128528