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1. CASH BOOK ;
cr side;
equipment \$6400

BALANCES AT 1 MAY 2011 30 APRIL 2012
equipment 12200 ?
equipment -
provision for depreciation 2400 ?

1) ERROR- during the year equipment which had cost \$1200 on 1 april 2009 was sold for \$900 .no record of sale had been made in the books.
2) DIPRECIATION POLICY- depreciation is charged on equipment at the rate of 15% per annum using straight line method on all equipment OWNED at the end of the year.

what is the total depreciation charged on on the equipment which was sold ? please show how you got the answer?
2. really !!!! noone!
3. Bought on 1/4/09

Held at 30/4/09,30/04/10,30/4/11 year ends (assumed not changed ye date in period)

Sold in year ended 30/4/12, I assume, question not very clear.

So how many years charged? Answer is X? ( remember only charged if held at year end)

Rate 15% each year SL, so 15*X=?
Cost 1,200
Associated depreciation on disposed asset is resultant above* 1,200

You need to think through what has happened with these sort of questions.

For a little extra effort try calculating gain/loss on disposal once you have solved above to further test your thinking and also create asset schedule /depreciation schedule for year ending 30/4/12

Cost

at 1/05/11 12,200
Disposals -1,200
at 30/4/12 17,400

depreciation

at 1/05/11 2,400
Disposals (as worked above)
Charge for year 15% cost at ye
at 30/4/12

NBV at 30/04/12 ???
NBV at 30/4/11 9,800

Cost sold 1200
Depcn sold (as calculated above)
NBV sold
Proceeds 900
Gain/loss

What we are not told is what has happened to the 900 proceeds, if not recorded has someone nicked the money or is the cashbook wrong?

Accounting is a subject mastered by doing so eventually you do not really think about the debits and credits, it becomes automatic, so do as many questions as you can and eventually it will all click.

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