Principles of Accounts

[Achmerd]

Here is the question....
Paul purchased a motor vehicle for $15 000. He estimated that it would be used for 5 years and then be sold for $2000. Paul decided to spread the depreciation of the motor vehicle equally over its working life at the rate of 20 % per annum.
What is the accumulated depreciation at the end of year 2?
A. $4680 B. $5200 C. $5400 D. $6000

Can anyone pls tell me hw to get the correct answer i.e B…...I want the working. Pls Pls Pls Pls… Help me!!

 

[Achmerd]

How was the test!!?? guys?

 

[excited]

Its easy no need to worry!

1) Use the formula [ Cost of asset - Residual value ] / No of expected years
Cost of the asset -------> $ 15,000
Residual Value / Scrap value -----------> $ 2000
No of expected years -------------> 5 years

15000 - 2000 / 5 = $ 2600 per year

In the question 2 years so $ 2600 x 2 = $ 5200


I GUESS I HELPED YOU.. PRESS THE THANK BUTTON IF I DID!!!!! :Yahoo!: :Yahoo!:

 

[Achmerd]

Thanks

 

[Achmerd]

how to draw the disposal accounts????? any formatts???

 

[excited]

If u are doing IGCSE accounting the format will be given.. If u r doing Cambridge O-level I do not know abt that.. But usually overall there is no format for disposal account.. The format matters only for provision for depreciation !! Disposal account matters only whether the company/business gains profit or incurred loss.. So, need of format for that!!

:good: :good: :good: :good: :good: :good: :good: :good: :good: :good: :good: :good:

 

[Achmerd]

Can any1 help me to solve this ques.!!!! (plspls pls any help appriciated!!!)

QUESTION

Ahmed started business on 1 May 2006 with a capital of $10,000. He balanced his sales ledger control account on 30 April 2007. It showed a balance of $18,000 and the balance did not agree with the total individual balances. When he examined ther records, the following errors were found and corrected.

1) The sales daybook had been overvalued by $2,000.
2) Cash discount, $89 allowed to Ali has been entered on the wrong side of the control account.
3) Goods sold on credit , $800 had not been entered in the sales ledger.
4) Payment of $450 made by Aksham, a credit customer had been omitted from the books.

REQUIRED:- Prepare an amended sales ledger control account

Ahmed's balances also showed the following on 30 April 2007
Creditor's control account balance = $10,500
Equipment = $8000
Cash = $100
Bank ( Cr ) = $300
Drawings = $600

Calculate Ahmed's NETPROFIT or LOSS for the year ended 30 April 2007.