# Calculation for depreciation

#### nacggk

17/1/18 Q Iam learning accounts. How to calculate this? Can anyone explain the reasons for the workings?

On 1 January 2017, Nico owned motor vehicles costing \$26 340 with accumulated depreciation of \$9 950 On 1 October 2017 a motor vehicle purchased on 1 April 2016 for \$4 200, with a carrying value of \$2 940, was sold. Motor vehicles are depreciated at 20% per annum, using the straight line method on the basis of one month’s ownership equals one month’s provision for depreciation. Nico maintains a cash float of \$500 and all sales are made for cash. During the year ended 31 December 2017, the following cash transactions were recorded.

Cash banked \$83 350 General expenses \$13 800 Motor expenses \$4 950 Proceeds from sale of motor vehicle \$ 2 100

4a) Calculate the profit or loss on disposal of the motor vehicle. The model answer is (\$840) I got wrong answer.
4b) Calculate the total depreciation charge for motor vehicles for the year ended 31 Dec 2017. The model answer is \$4428 + \$630 = \$5058 / \$3951 + \$1107 = \$5058

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

### Members online

No members online now.