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Friday, April 9, 2021

QUEENSMOUNT LIMITED DEPRECIATION WORKSHEET 2

 

QUEENSMOUNT LIMITED (QML)- DEPRECIATION WORKSHEET

Depreciation worksheet


Rachel has set up a private limited company named QUEENSMOUNT Ltd (QML). Rachel’s family owns the majority of shares. QML is specialized in manufacturing smartphones, laptops, smartwatches, mp3 devices, and other various electronic gadgets. QML’s consumers are teenagers to adults that keep up with the trend and modernity. At the end of both years, Rachel has asked her finance department to present a record of all the figures for the years 2020 and 2021.

 

Details

31 March 2020 ($)

 31 March 2021 ($)

Revenue

50,000

54,000

Expenses

9,400

10,200

Cost of sales

21,600

23,800

Fixed assets

60,000

70,000

Interest

1,000

1,500

Tax

2,000

2,600

 

As per the QML’s accounting policy, all the fixed assets have been depreciated at the rate of 8 % per annum using the straight-line method.

 Questions

a)      Define the term private limited company.

[2 marks]

b)     State two differences between fixed assets and current assets

[ 4 marks]

c)      Calculate the annual amount of depreciation. Show  the formula and all workings

 

[ 4 marks]

d)     Using the financial information provided for 2020 and 2021, prepare a  profit and loss account for both the years by calculating profit whilst incorporating the provision for depreciation.

 

 

[ 8 marks]

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