A company depreciates its equipment at the rate of 20 per cent per annum using the straight
Question:
A company depreciates its equipment at the rate of 20 per cent per annum using the
straight line method, for each month of ownership.
20X4 Bought equipment costing $900 on 1 January
Bought equipment costing $600 on 1 October
20x5 No purchase or sale of equipment
20X6 Bought equipment costing $550 on 1 July
20X7 Sold equipment which cost $900 which was bought on 1 January 20X4 for
$275 on 30 September 20X7
The accounting year ended on 31 December each year.
Required:
(a) Draw up the equipment account and the provision for depreciation equipment account for years 20x4, 20x5, 20x6, and 20x7.
(b) What is the profit or loss on the disposal of equipment sold on 30 September 20x7?
Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein