《Level 2 Ch 1 Disposal Workheet》.doc

Classwork 1 If we bought a motor van for $20,000, thinking that we would keep it for 5 years and then sell it for $5,000. Depreciation per annum = = 2001 2002 2003 2004 2005 2006 2007 2008 Classwork 2 If we bought a motor van for $20,000, thinking that we would keep it for 5 years and then will sell it for $5,000, depreciation rate is 20%. Note: No need to considerate the scrap value. $ Cost First Year Depreciation ($20,000 x ) Net book value at the end of the first year Second Year Depreciation ($ x ) Net book value at the end of the second year Third Year Depreciation ($ x ) Net book value at the end of the Third year 2001 2002 2003 2004 2005 2006 2007 2008 Classwork 3 Beginning of the period $120,000 End of the period $100,000 Buy the new one $50,000 Motor Vehicles $ $ Bal b/d Profit Loss – depreciation Bank Bal c/d Classwork 4 The original cost of a equipment is $50,000. The expected useful life and the estimated scrap value are 5 years and $5,000 respectively. Year Digit Assigned Provision for Depreciation 1 5 $(50,000 – 5,000) x 5/15 = 2 4 $(50,000 – 5,000) x 4/15 = 3 3 $(50,000 – 5,000) x 3/15 = 4 2 $(50,000 – 5,000) x 2/15 = 5 1 $(50,000 – 5,000) x 1/15 = Total 10 $45,000 2001 2002 2003 2004 2005 2006 2007 2008 Classwork 5 The original cost of a equipment is $100,000. The estimated scrap value and the estimated number of production are $10,000 and 5,000 units respectively. Year Number of units produced Provision for Depreciation 1 2,000 $90,000 x 2,000/5,000 units = 2 500 $90,000 x 500/5,000 units = 3 600 $90,000 x 600/5,000 units = 4 1,000 $90,000 x 1,000/5,000 units = 5 900 $90,000 x 900/5,000 units = Total 5,000 $90,000 Classwork 6 A machine is bought for $10,000 on 1