As at 1 January 2010, Paula Confectioners own several machines acquired at a total cost of 480,000
Question:
As at 1 January 2010, Paula Confectioners own several machines acquired at a total cost of £480,000 and written down by that date to £218,400. On 1 April 2010 they acquired another machine for £160,000. They depreciate machinery at 10% per annum, using the straight-line method with proportionate depreciation in the year of acquisition.
Required:
Calculate the depreciation expensed in the year ended 31 December 2010 and show how the machinery will be reported on the Statement of financial position as at that date. The difference between the cost (£480,000) and the wdv (£218,400) would be the accumulated depreciation written off until 1 January 2010 and appearing in the Accumulated depreciation of motor vehicles account as at that date.
Step by Step Answer:
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict