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4 marksDepreciation and Capital versus Revenue Expenditure

CSEC Principles of Accounts · January 2014 · Paper 2 · Question 4(a)(i)

Mary Jane operates a vehicle hire business. On 1 January 2011, a limousine costing 90 000 had accumulated depreciation of 9 000. Depreciation is charged at 10% per annum using the reducing balance method.

Calculate the depreciation expense to be charged for EACH of the TWO years ending 31 December 2011 and 31 December 2012.

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Other parts of this question

  1. 4(a)(ii)Draw up the Provision for Depreciation Account for the TWO years.[5 marks]
  2. 4(a)(iii)Prepare the Fixed Assets section of the balance sheet for the limousine as at 31 December 2011.[4 marks]
  3. 4(b)State the heading in the balance sheet under which 'Prepaid Rental Revenue' would appear.[1 mark]
  4. 4(c)Steve Treft owed Mary Jane 6 000 for services received and was declared bankrupt. On 31 December 2012, he paid a dividend of 0.25 on every dollar owed in…[6 marks]

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