Depreciation Q7

Q.
a) A machine costs RM8,000. It was kept for five years, then sold for RM2,400. Show the calculations of the figures for depreciation for each year for five years using:-

i) The Straight Line Method
ii) The Reducing  Balance Method at 20% of depreciation rate.

(10 marks, 2011 7a)

b) A motor vehicle which cost RM12,000 was bought on credit from Blue Sdn Bhd on 01 Jan 2009. Financial statements are prepared annually to 31 December and depreciation of vehicles is provided at 25% per annum under the Reducing Balance Method.

Prepare the Journal Entries, the Motor Vehicle Account, and the Accumulated Provision for depreciation on Motor Vehicle Account for the first two (2) years of the Motor Vehicle's working life.

(10 marks, 2011 7b)