On 1 January 20X1 a business purchased a laser printer costing £1,800. The printer has an estimated life of 4 years after which it will have no residual value. It is expected that the output from the printer will be:

Required:

(a) Calculate the annual depreciation charges for 20X1, 20X2, 20X3 and 20X4 on the laser printer on the following bases:

(i) The straight line basis,

(ii) The diminishing balance method at 60% per annum, and

(iii) The units of output method.

Your workings should be to the nearest £.

(b) Suppose that in 20X4 the laser printer were to be sold on 1 July for £200 and that the business had chosen to depreciate it at 60% per annum using the diminishing balance method applied on a month for month basis.

Reconstruct the following accounts for 20X4 only:

(i) The Laser Printer account,

(ii) The Provision for Depreciation – Laser Printer account, and

(iii) The Assets Disposals account.

Transcribed Image Text:

Year 20X1 20X2 20X3 20X4 Sheets printed 35,000 45,000 45,000 55,000 180,000