In: Business and Management

Submitted By gunjan3031
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Depreciation Example | Cost | $ 110,000 | Salvage value | $ 20,000 | Useful life | 5 | Purchase date | January 1, 2011 | Straight line depreciation Year | Depreciation | | 2011 | $ 18,000 | =($110,000 - $20,000) x 1/5 | 2012 | $ 18,000 | =($110,000 - $20,000) x 1/5 | 2013 | $ 18,000 | =($110,000 - $20,000) x 1/5 | 2014 | $ 18,000 | =($110,000 - $20,000) x 1/5 | 2015 | $ 18,000 | =($110,000 - $20,000) x 1/5 | Total | $ 90,000 | | Double declining balance depreciation = 200% of SLD. Depreciation rate = 40% of WDV Year | Book value at the beginning of year | Depreciation rate | Depreciation expense | | Accumulated depreciation | Book value at year-end | 2011 | $ 110,000 | 40% | $ 44,000 | | $ 44,000 | $ 66,000 | 2012 | $ 66,000 | 40% | $ 26,400 | | $ 70,400 | $ 39,600 | 2013 | $ 39,600 | 40% | $ 15,840 | | $ 86,240 | $ 23,760 | 2014 | $ 23,760 | 40% | $ 3,760 | (*1) | $ 90,000 | $ 20,000 | 2015 | $ 20,000 | 40% | $ - | | $ 90,000 | $ 20,000 | Total | | | $ 90,000 | | | |
(*1) Depreciation stops when accumulated depreciation reaches depreciation base.
Depreciation base = cost - salvage value = $110,000 - $20,000 = $90,000 |

Company X had purchased a Car on 1 April 2009 for ` 300,000. The car was sold for ` 100,000 on 30 June 2012.

Depreciation rate on Car for various years were as under:

2009-10: WDV 20%
2010-11: WDV 20%
2011-12: WDV 30% (to be considered as change in method; w. e. f. - 1 April 2011)
2012-13: WDV 30%

The financial year of the company ended on 31-March every year.

Fill in the blanks:

Year | Depreciation Expense | Adjustments due to change in method | Profit/ (Loss) of car | Accumulated Depreciation (Balance sheet figure) | 2009-10 | 60000 | 0 | 0 | 60000 | 2010-11 | 48000 | 0 | 0 | 108000 | 2011-12 |…...

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