State which of the following would be revenue expenditure and which would be capital expenditure: i)...
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State which of the following would be revenue expenditure and which would be capital expenditure: i) Cost of building extension to factory ii) Cost of repairs to accounting machine Purchase of replacement engine for existing van iv) A quarterly bill for heating expenses. v) Purchase of extra filing cabinets for office. Adams commenced her business on 1 Jan 2005 and prepares accounts to 31 Dec each year. The following movements in Non-current assets took place: Date Details 1 Mar 2005 1 Oct 2005 1 Jan 2007 Adams' depreciation policy is as follows: . Any asset purchased in the first six months of a year has a whole year's depreciation provided, while any asset purchased in the second half of the year has only a half year's depreciation written off. No depreciation is provided in the year of disposal. Motor vehicle: 25% per annum, using the straight line method. Office equipment: 30% per annum, using the reducing balance method. REQUIRED a) Allowance for depreciation for motor vehicle account . . Purchased motor vehicle for $25,000 paying by cheque Purchased office equipment for $16,000 on credit from ICF Co. Ltd. Sold the motor vehicle purchased on 1 Mar 2005 for $12,000 cash. A cheque for $30,000 was paid for a new vehicle. . b) Office equipment account c) Allowance for depreciation for office equipment account d) Asset disposal account (only for the year ended 31 December 2007) e) Prepare the Statement of Financial Position extracts as at 31 December 2005,2006 and 2007 for both Motor Vehicle and Office Equipment. f) Name two causes of depreciation g) Name one method of depreciation other than straight line or reducing balance. State which of the following would be revenue expenditure and which would be capital expenditure: i) Cost of building extension to factory ii) Cost of repairs to accounting machine Purchase of replacement engine for existing van iv) A quarterly bill for heating expenses. v) Purchase of extra filing cabinets for office. Adams commenced her business on 1 Jan 2005 and prepares accounts to 31 Dec each year. The following movements in Non-current assets took place: Date Details 1 Mar 2005 1 Oct 2005 1 Jan 2007 Adams' depreciation policy is as follows: . Any asset purchased in the first six months of a year has a whole year's depreciation provided, while any asset purchased in the second half of the year has only a half year's depreciation written off. No depreciation is provided in the year of disposal. Motor vehicle: 25% per annum, using the straight line method. Office equipment: 30% per annum, using the reducing balance method. REQUIRED a) Allowance for depreciation for motor vehicle account . . Purchased motor vehicle for $25,000 paying by cheque Purchased office equipment for $16,000 on credit from ICF Co. Ltd. Sold the motor vehicle purchased on 1 Mar 2005 for $12,000 cash. A cheque for $30,000 was paid for a new vehicle. . b) Office equipment account c) Allowance for depreciation for office equipment account d) Asset disposal account (only for the year ended 31 December 2007) e) Prepare the Statement of Financial Position extracts as at 31 December 2005,2006 and 2007 for both Motor Vehicle and Office Equipment. f) Name two causes of depreciation g) Name one method of depreciation other than straight line or reducing balance.
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Cost of building extension to factory Capital expenditure Cost of repairs to accounting machine Revenue expenditure Purchase of replacement engine for ... View the full answer
Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
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