IGCSE Accounting Paper-2: Specimen Questions with Answers 18 - 19 of 189
Passage
Mr. Jack purchases machinery at a cost of £ 100000. The life of the machinery is said to be 3 years At the end of 3 years the machinery is sold as scrap at £ 20000.
Question 18 (3 of 5 Based on Passage)
Write in Short Short Answer▾
Calculate the profit or loss of Mr. Jack if he depreciates the machinery on Written down value method
EditExplanation
Profit of £ 489
PARTICULARS | AMOUNT |
Cost of asset in year 1 | 100000 |
Less Depreciation@42% | 42000 |
Book value at the end of year 1 | 58000 |
Book value at the beginning of year 2 | 58000 |
Less Depreciation@42% | 24360 |
Book value at the end of year 2 | 33640 |
Book value at the beginning of year 3 | 33640 |
Less Depreciation@42% | 14129 |
Book value at the end of year 3 | 19511 |
Scrap value | 20000 |
Profit = Scrap Value - Book Value | 489 |
Question 19 (4 of 5 Based on Passage)
Write in Short Short Answer▾
Calculate the profit or loss of Mr. Jack if he depreciates the machinery on Straight line method assuming the percentage of depreciation is 25%
EditExplanation
Loss of £ 5000
PARTICULARS | AMOUNT |
Cost of asset in year 1 | 100000 |
Less Depreciation@25% | 25000 |
Book value at the end of year 1 | 75000 |
Book value at the beginning of year 2 | 75000 |
Less Depreciation@25% | 25000 |
Book value at the end of year 2 | 50000 |
Book value at the beginning of year 3 | 50000 |
Less Depreciation@25% | 25000 |
Book value at the end of year 3 | 25000 |
Scrap value | 20000 |
Loss = Book Value - Scrap Value | -5000 |