IGCSE Accounting Paper-1: Specimen Questions with Answers 81 - 83 of 338

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Passage

Aieno bought fixed asset at a cost of $ 50000 on 1st Aprils 2014. Calculate its net book value as on 31st March 2016 if it is depreciated:

Question 81 (2 of 4 Based on Passage)

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Short Answer▾

Which method of depreciation is used for live – stock and state your reason also

Explanation

Revaluation method.

The revaluation method is suitable for asset like live – stock because which call for special consideration and no other method are suitable for secure satisfactory results. It is very simple to understand and use. The difference between the asset value at the beginning and at the end is depreciated and charged to profit and loss account. If the value of asset at the end of year are higher than the beginning then the difference is ignored.

Question 82 (3 of 4 Based on Passage)

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At 15 % per annum on the straight line basis.

Explanation

$ 35000

The depreciation is charged evenly every year till the effective life of an asset.

Net Book Value as on 31st March 2016 =

Question 83 (4 of 4 Based on Passage)

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At 20 % per annum on the written down value method:

Explanation

$ 32000

The depreciation is charged on the reduced value of the asset for every year. The written down value method is also known as diminishing value method.

Depreciation on 31st March 2015 =

Depreciation on 31st March 2016 =

Net Book Value as on 31st March 2016 =

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