1
On 1 January 2001 a business purchased a laser printer for £1,800. The printer has an
estimated life of 4 years after which it will have no residual value.
It is expected that the output from the printer will be:
Year Sheets printed
2001 35,000
2002 45,000
2003 45,000
2004 55,000
180,000
Required:
(a) Calculate the annual depreciation charges for 2001, 2002, 2003 and 2004 on the laser printer
on the following bases:
(i
) the straight line basis,
(ii
) the diminishing balance method at 60% per annum, and
(iii
) the units of output method.
Note
: Your workings should be to the nearest £.
(b) Suppose that in 2004 the laser printer were to be sold on 1 July for £200 and that the business
had chosen to depreciate it at 60% per annum using the diminishing balance method applied
on a month for month basis.
Reconstruct the following accounts for 2004 only:
(i
) the laser printer account,
(ii
) the provision for depreciation – laser printer account, and
(iii
) the assets disposals account.
(a)
(Association of Accounting Technicians)