Aim: to cover most issues to do with Depreciation.
1. Business bought a Delivery Van on 1/11/11 for $40000 + $4000 GST. Modifications to suit business
requirements cost $4000 + $400 GST. At the time of purchase, paid $660 including $60 GST for annual
registration expenses. It is estimated that the Delivery Van will be scrapped for $20000 at the end of 6
years.
1.1 Calculate depreciation expense for the reporting period ending 30/6/12. Show calculations.
1.2 Indicate the impact of the depreciation calculated in 1.1 on:
Cash Flow Statement:________________________________________________________________
Profit/Loss Statement: ______________________________________________________________
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Balance Sheet ______________________________________________________________________
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1.3 Show the Balance Sheet extract for Delivery Van at 30/6/14.
Non Current Assets at 30/6/14
1.4 "The net figure shown in the Balance Sheet extract above is called
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1.5 The net figure in 1.3 represents the current market value of the Delivery Van." Comment.
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1.6 Recall a definition of depreciation.
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