Accounting problem

Sarah96

Im really stuck on the depreciation part of the sole trader trading profit and loss accounts. When it says to get depreciation of net book value I haven't a clue where to get the figures from and my book doesn't explain it at all.

The question is
Office equipment. 56000
Acc depreciation on office equipment 56000

And depreciation is 10% of net book value.

Could anyone advice me on how to go about this I have looked at solutions and can't see where their gettin the numbers from

Oh also is cost per annum just the cost price?

sillybill

Hi
If office equipment is 56000 and deprecition is 10% that is 5600 so 56000 - 5600 is 51400 so that is the net book value so for year 2 it would be 10% of 51400 so 5140 would be the depreciation for year 2.

cost per annum is the cost every year. hope that helps

Achieve Greatness

Sarah96 wrote: »

The question is
Office equipment. 56000
Acc depreciation on office equipment 56000

Are you sure this is right, as that would give the equipment a NBV of €0? And if this was the case, you would not provide for depreciation at all as you cannot over depreciate an asset.

grangerka

Your accumulated depreciation doesn't look right.
To get the present net book value you substract accum depreciation from the original cost of the building.
To calculate depreciation for the year you take (original cost of the building-accum depreciation)*10%
your cost for the year is just that calculated depreciation

Sarah96

Thank you for all your help!
Apologies the acc depreciation is 22400