Question

Use the following information for the questions 1 2 & 3
On 1 st January 2015 Musheer LLC Company started a business of selling and buying Garments
products at Muscat. The company has brought few assets while starting the business namely
cash balance RO 32250, Bank balance RO 29750, short term investments RO 22150. The
company was running successfully the garments products business and started earning good
profits and the company gradually improved their business during the first six months also
purchased a machinery 1 st March 2015 RO 175690 and installation 11810 and life of the machine
is 5 years with scrap value of RO 22000. The company has brought additional capital of RO
1050000 in addition to the regular profits and purchased a building for RO 142750 on 1 st
September 2015 and a loan also borrowed from the Bank Muscat by showing the past months
profits on October 2015 of RO 105000 at 7% interest payable every year. The company with the
positive progress in the garment products business they also started a new branch at Ibra with a
capital of RO 122900. The company had bought one Equipment on 1 st June 2016 in another
branch for RO 97280 with the installation value of RO 22820 which has estimated life of 5 years
with the estimated scrap value of The Company of 13500 and the equipment is depreciated at
25% per annum on reducing balance method/written down value method. The Company closes it
books of account every year on 31 st December and Mr. Muneer a new accountant has been
appointed in the company who is a fresh Bachelor Graduate in accounting with high GPA but he
wants your expertise knowledge to understand the concept of the depreciation and
You are required to prepare depreciation schedule for the following non-current assets
showing all the working notes
A)  Equipment for five years under reducing balance method or written down value
method
B) .Machinery for five years under Straight Line Method

C)Building for five years under straight line method

Note: please write the answer in text format in word

Answer 1

	Cell Reference	Particulars	Machinery	Building	Equipment
	A	Date of Purchase	1st March 2015	1st September 2015	1st June 2015
	B	Purchase Price of asset	175,960	142,750	97,280
	C	Installation cost of asset	11,810		22,820
	D=B+C	Total capital cost of asset	187,770	142,750	120,100
	E	Salvage value/scrap value	22,000		13,500
	F=D+E	Depreciable value of asset	165,770	142,750	106,600
	G=F/H	Depreciation per year	33,154	28,550
	H	Life of Asset	5 Years	5 Years	5 Years
	H	Method of Depreciation	Straight-line method	Straight-line method	25% Written down value method
		Depreciation schedule for Machinery under straight-line depreciation method
		Particulars	Opening value of asset	Depreciation	Closing value of asset
		Depreciation from 1st March 2015 to 31 December 2015 (10 Months)	187,770	27,628	160,142
		Depreciation for 2016	160,142	33,154	126,988
		Depreciation for 2017	126,988	33,154	93,834
		Depreciation for 2018	93,834	33,154	60,680
		Depreciation for 2019	60,680	33,154	27,526
		Depreciation from 1st January 2020 to 28th February 2020 (2 Months)	27,526	5,526	22,000
		Total		165,770.00
		Depreciation schedule for Building under straight-line depreciation method
		Particulars	Opening value of asset	Depreciation	Closing value of asset
		Depreciation from 1st September 2015 to 31 December 2015 (4 Months)	142,750	9,517	133,233
		Depreciation for 2016	133,233	28,550	104,683
		Depreciation for 2017	104,683	28,550	76,133
		Depreciation for 2018	76,133	28,550	47,583
		Depreciation for 2019	47,583	28,550	19,033
		Depreciation from 1st January 2020 to 30th August 2020 (8 Months)	19,033	19,033.33	-
		Total		142,750.00
		Depreciation schedule for Building under written down value method
		Particulars	Opening value of asset	Depreciation**	Closing value of asset	Remarks
		Depreciation from 1st June 2015 to 31 December 2015 (7 Months)	120,100	17,515	102,585	=120,000*25%= 30,025/12 months* 7 months
		Depreciation for 2016	102,585	25,646	76,939
		Depreciation for 2017	76,939	ekkarill92 Next > < Previous Related Solutions Use the following information for Questions 1-7, which will appear on pages 2 and 3 of... Use the following information for Questions 1-7, which will appear on pages 2 and 3 of this exam. You will use the information to prepare elements of the ABC Company Budget for the 4th quarter (October, November, and December) of 2018. The following balances were taken from the ABC Company’s balance sheet on September 30, 2018: Cash                                      25,000 Accounts Receivable       90,000 Inventory                            30,000 Accounts Payable             54,000 The following information is also available and pertaining to ABC Company: ABC sells... Use the following information to answer Questions 6 and 7. The 1-, 2-, 3-, and 4-year... Use the following information to answer Questions 6 and 7. 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