Income statement for trial balances
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The trial balance as at 31 March 2007
(1)
Office equipment, at cost 2,750,000 (DR)
Motor vehicles, at cost 937,500 (DR)
Land, at valuation 2,487,500 (DR)
Accumulated depreciation at 1 April 2006
Office equipment 2,016,800 (CR)
Motor vehicles 126,572 (CR)
Additional information relates to the above:
Depreciation is to be provided for the year as follows:
Land Nil
Office equipment 20% per annum on cost
Motor vehicles 25% per annum on written down value
Office equipment costing $600,000 was fully depreciated.
Now, I have to prepare the income statement for the year end March 2007, how can I calculate the drpreciation of motor vehichles and equipment?
(2)
Inventory at 1 April 2006 375,000
The inventory at 31 March 2007 had cost and market value as
follows:
Category Cost Market value
X 125,000 120,000
Y 250,000 370,000
Z 100,000 160,000
Total 475,000 650,000
When I calculate the costs of goods sold, the opening inventory should be 375,000, but I am not sure whether the closing inventory shoud be 475,000 or 650,000.
Please advise.
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Solution Summary
Solution contains calculations of depreciation and valuation of inventory.
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Hi,
Please see the response to your posting as below:
1.
a. Calculation of depreciation on office equipment
Office equipment 20% per annum on cost
Cost of equipment = 2,750,000
Amount fully depreciated =600000
Cost of the equipment on 1st April 2006 = ...
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