Answer to Question #280630 in Accounting for Lola

Question

On 1 January 2020 Power Lid purchased a vehicle for $12 000 cash. It is the policy of the company

to depreciate vehicles at the rate of 20 % per annum under the straight-line method.

On 1 May 2020 the company bought a furniture for $4 000 by cheque. It is estimated that the

furniture will have a useful life of 3 years after which it will have scrap value of $100

a) Calculate depreciation for the vehicle for the year ended 31 December 2020 and 2021.

b) Calculate depreciation for the furniture for the year ended 31 December 2020 and 2021.

Answer 1

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