Depreciation Problems and Solutions
Previous Lesson: Financial Accounting Problems and Solutions
Next Lesson: Final Accounts Problems and Solutions
Problem # 1:
Noor Bakhat & Company purchased a factory machine of Rs. 51,000 on January 1, 2015. The machine is expected to have a salvage value of Rs. 6,000 at the end of its 5 year useful life. During the useful life, the machine is expected to be used for 5,000 hours. The machine was used as under:
Required: Prepare Schedule of Depreciation on the basis of following methods
- Straight Line Method
- Units of Output Method
- Double Declining Balance Method
- Sum of Year Digit Method
Solution (a): Straight Line Method
Solution (b): Units of Output Method
Solution (c): Double Declining Balance Method
Solution (d): Sum of Year Digit Method
For more detail of Depreciation
Problem # 2:
A small delivery truck purchased by Sheikh Sadan Mazhar on January 1, 2014:
Cost $ 13,000
Expected salvage value $ 1,000
Estimated useful life ( years) 5
Estimated useful life ( miles) 100,000
Miles expected used are:
Required: Prepare Schedule of Depreciation on the basis of following methods
- Straight Line Method
- Units of Output Method
- Double Declining Balance Method
Solution (a): Straight Line Method
Solution (b): Units of Output Method
Solution (c): Double Declining Balance Method
Practice Depreciation MCQs
Problem # 3:
Hafiz Ullah & Company purchased a factory machine of Rs. 180,000 on January 1, 2012. The machine is expected to have a salvage value of Rs. 20,000 at the end of its 4 year useful life. During the useful life, the machine is expected to be used for 160,000 hours. The machine was used as under:
Required: Prepare Schedule of Depreciation on the basis of following methods
- Straight Line Method
- Units of Output Method
- Diminishing Balance Method
- Sum of Year Digit Method
Solution (a): Straight Line Method
Solution (b): Units of Output Method
Solution (c):Diminishing Balance Method
Solution (d): Sum of Year Digit Method
0 Comments