Annie runs a trading business. Her trading year end is 30 June. She provided the following...

  

Transcribed Image Text:

Annie runs a trading business. Her trading year end is 30 June. She provided the following information relating to her non-current assets on 30 June 2022. Plant and machinery Cost RM 500,000 Accumulated depreciation RM 200,000 Motor vehicles Cost RM 300,000 Accumulated depreciation RM 100,000 Her accounting policy is to depreciate non-current assets as follows: Plant and machinery at 10% per annum using the straight-line basis Motor vehicles at 25% per annum using the reducing balance basis A full year's depreciation is charged in the year of purchase No depreciation is charged in the year of disposal Required: (a) Calculate the depreciation charge and accumulated depreciation for the year ended 30 June 2022 in respect of the plant and machinery. (5 marks) (b) Calculate the depreciation charge and accumulated depreciation for the year ended 30 June 2022 in respect of the motor vehicle. (5 marks) (c) Annie is thinking of changing the method of depreciation each year to show the highest profit possible. Advise Annie whether she should do this, giving two reasons for your answer. Annie runs a trading business. Her trading year end is 30 June. She provided the following information relating to her non-current assets on 30 June 2022. Plant and machinery Cost RM 500,000 Accumulated depreciation RM 200,000 Motor vehicles Cost RM 300,000 Accumulated depreciation RM 100,000 Her accounting policy is to depreciate non-current assets as follows: Plant and machinery at 10% per annum using the straight-line basis Motor vehicles at 25% per annum using the reducing balance basis A full year's depreciation is charged in the year of purchase No depreciation is charged in the year of disposal Required: (a) Calculate the depreciation charge and accumulated depreciation for the year ended 30 June 2022 in respect of the plant and machinery. (5 marks) (b) Calculate the depreciation charge and accumulated depreciation for the year ended 30 June 2022 in respect of the motor vehicle. (5 marks) (c) Annie is thinking of changing the method of depreciation each year to show the highest profit possible. Advise Annie whether she should do this, giving two reasons for your answer.

Answer rating: 100% (QA)

a Calculation of Depreciation and Accumulated Depreciation for Plant and Machinery Cost of Plant and Machinery RM 500000 Accumulated Depreciation as o... View the full answer