A light video to introduce the topic.
The slide show takes you one step at a time from the concept to calculations to detailed accounting for Depreciation of NCAs.
Ali started in business as an auto mechanic on Jan 1, 2012. At that he bought tools (screwdrivers, spanners, hammers etc) for $400 paid by cheque. During the year, tools worth $50 were worn out and thrown away and some tools were sold as scrap for $70. He also bought new tools during the year for $80 paid in cash. At the end of the year, he valued his tools at $250.
a) Calculate depreciation (using Revaluation method) for the year on tools;
b) Prepare tools account for the year ended 31 Dec 2012 showing clearly the deprecation (transfer to I/S) for the year.
Past exam mcq's on the topic.