First, we need to calculate the depreciation expense for each vehicle:
Vehicle No. 1:
Depreciation expense = (20,000 - 5,625) x 15% = 2,343.75
Vehicle No. 2:
Depreciation expense = 30,000 x 15% = 4,500
Vehicle No. 3:
Depreciation expense = 40,000 x 15% = 6,000
Total depreciation expense for the year ending 31 December 2019:
= 2,343.75 + 4,500 + 6,000
= 12,843.75
Therefore, the depreciation expense for the year ending 31 December 2019 is K 12,843.75.
Break -up of Peter’s motor vehicle account is as follows:
Balance as at 1.1.2019 K 45 000
Accumulated depreciation 1.1.2019 K 5 625
Purchases during the year:
1.1.2019 Vehicle No. 1 K 20 000
30.6.2019 Vehicle No. 2 K 30 000
1.10.2019 Vehicle No. 3 K 40 000
Annual depreciation rate is 15%
Required:
Calculate depreciation expense for the year ending 31 December 2019.
1 answer
1 answer