Calculate and prepare Journal entries to depict depreciation for the assets for the period ended 31 December 2020 for ABC pvt Ltd.
The below is an extract from the fixed asset register of ABC Ltd as at 31 December 2019
Date of
Purchase
Cost useful life
Land 1-Jan-30 6,000,000.00 0
Building 28-Feb-17 2,000,000.00 20
Vehicle: 650,000.00
Toyota Hilux 1-Oct-19 350,000.00 5
Ford Ranger 30-Jun-17 300,000.00 5
Furniture and Fittings 1-May-20 150,000.00 2
Activities throughout the 2020 Financial Period:
1. New Machinery have been purchased on 01 April 2020 at a Cost of N$ 4000,000.
The machinery has been installed on the 15 April 2020 and was available for use on the 01 May
2020. Machinery is the only property plant and equipment of the company that is measured
according to the revaluation method.
1.1. On the 30th of October 2020 management decided to revalue the machinery due to a drastic
decline in the revenue from sale of machinery produced inventory.Net replacement cost for the
machine as at the 30th of October 2020 is N$2 000 000.
2. The Toyota Hilux was involved in an accident on 1 October 2020 due to the floods and was
written off by the insurance company. A new vehicle has been purchased with the insurance
claim on the 31st of December 2020.
3. Portions of land were sold as below:
Land costing N$500 000 sold for N$700 000 to a business person.
Land costing N$200 000 has been donated to a pre-school for children with learning disabilities.Page 13 of 21
4. A floor of the building costing N$600 000 has been turned into a commercial rental space for
dentists.
5. Assets are
6. Residual value of 10% of cost is applied to all assets purchased in the financial period ending
December 2020.
QUESTION;
Calculate and prepare
period ended 31 December 2020 for ABC pvt Ltd.
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