Re: ::::|| VU ||::::plz hellllllllllllllllllllllllllllllp ((((((((((9MGT 101 GDB Solution required ))))))))))))

SOLUTION

 

(1)        List price of machinery                                 = 500,000

Discount rate                                                 = 2%

Discount amount                                           = 500000*0.02

                                                                                    =   10,000

Cost paid for machinery purchases             = 500,000-10,000

                                                                                    =   490,000

Other expenses and installation costs          = 20,000+5,000+35,000

                                                                                    =  60,000

Total cost of asset capitalized                       = 490,000+60,000

For balance sheet                                          = 550,000

 

 

(2).   The annual depreciation expense for year 20X3 under straight-line method;       

 

 

Depreciation = cost – residual value/ estimated life

                                    =  550,000-50,000/10

                                    =  50,000

 

 

 

 (3) The annual depreciation expense for year 20X4 under declining balance method;

 

 

Reducing balance method of depreciation              = 1- nÖRV/C

                                                                                    = 1- 10Ö50, 000/550,000

                                                                                    = 22%

 

Year	Particulars	Depreciation	Written Down Value
	Depreciable cost		550,000
20X3	550,000*22%	121,000	429,000
20X4	429,000*22%	94,380	334,620

 

On Thu, Jun 9, 2011 at 5:35 PM, mc110200946 Shamaila <mc110200946@vu.edu.pk> wrote:

MGT 101 GDB Solution required

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