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    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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    https://brainmass.com/business/income-statement/income-statement-trial-balances-154645

    Solution Preview

    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 = ...

    Solution Summary

    Solution contains calculations of depreciation and valuation of inventory.

    $2.19

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