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Income statement for trial balances

The trial balance as at 31 March 2007
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?

Inventory at 1 April 2006 375,000
The inventory at 31 March 2007 had cost and market value as
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.

Solution Preview

Please see the response to your posting as below:
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.