A.Depreciation Calculation
Cost of office equipment is given as = 6300
- Salve value at end of its life = (700 )
Cost of amount depreciate through
out its use full life. = 5600
Amount to be depreciate during current year= 5600/5
= 1120
Correct one is = c
Reason.
In above statement its clearly mentioned that amount of expenses show in income statement and amout flow in Operating cash flow
. In statement we show only depreciation of capital assets
. In Operating cash flow we will show only amount related to our daily activities
. Purchase of capital assets will show in Cash from investing activities.
B.Calculation of depreciation.
Given cost of truck. =40000
Salvage at the end its usefull life. =(4000)
Amount of cost needed to depreciate
Throughout its use full life. =36000
Amount of cost needed to depreciate
during current year. =36000/200000*30000
=5600
Depreciation on truck is bester to calculate based on number of miles rather than its usefull life.
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