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11 marksDepreciation and Capital versus Revenue Expenditure

CSEC Principles of Accounts · January 2012 · Paper 2 · Question 3(b)(i)

Tamarind Company bought equipment costing $80 000 and charged depreciation at a rate of 10% per annum using the reducing-balance method.

Copy and complete the table calculating the cost or net book value before depreciation, depreciation expense for the year, accumulated depreciation, and net book value after depreciation for the first THREE years of the equipment's life.

This question uses a figure or table from the paper — you'll see it when you practise.

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Other parts of this question

  1. 3(a)(i)Define the term 'depreciation'.[2 marks]
  2. 3(a)(ii)Identify the double entry used to record depreciation.[2 marks]
  3. 3(a)(iii)State THREE causes of depreciation.[3 marks]
  4. 3(b)(ii)Draw up the Balance Sheet extract for the equipment at the END of the third year of use.[2 marks]

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