TRUIMPHANT COLLAGE

Assignment 1
Name: Bronwine F. Morris
Address: B9, Taurus court, BC Barnes street, Klein Windhoek
Student number: 2019021770
Course: Business Management
Subject: Accounting and Finance
Due date: 12 February 2019
Lecturer: Mr. Custon

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 Question 1
DR Receipts CASH BOOK CR PAYMENTS
Date Description VN PR DISC CASH BANK DATE DISCRIPTION VN PR DISC CASH Bank
2018 2018

Jun1 Balance d 800 3365 Jun3 James& Co 60 25 1175

Jun5 David& Co 25 10 990 Jun7 Bank 990

Jun7 Cash C 990 Jun10 Stationary 440 170

Jun15 Sales 405 2450 Jun15 Purchases 420 1280

Jun16 Cash C 1250 Jun16 Bank C 1250

Jun24 Henry& Co 30 15 1435 Jun18 Drawings 445 100

Jun30 Sales 405 4550 Jun19 James& Co 60 20 1630

Jun30 Bank C 470 Jun21 Cash C 420

Jun25 Jacob Inc 65 15 385

Jun27 Furniture 425 380

Jun29 Rent 435 350

Jun30 Salaries 415 760

Jun30 Balance c/d 5610 1750

25 9680 7040 60 9680 7040

450 455

July1 Balance 5610 1750

b/d

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Question 2

1. Depreciation
Depreciation is defined as the reduction of recorded cost of a fixed asset in a
systematic manner until the value of the asset becomes zero or negligible.
An example of fixed assets are buildings, furniture, office equipment and
machinery
2.

 Wear and tear: Any asset will gradually break down over a certain usage
period, as parts wear out and need to be replaced. Eventually, the asset can
no longer be repaired, and must be disposed of. This cause is most common
for production equipment, which typically has a manufacturer's recommended
life span that is based on a certain number of units produced. Other assets,
such as buildings, can be repaired and upgraded for long periods of time.
 Perishability: Some assets have an extremely short life span. This condition is
most applicable to inventory, rather than fixed assets.
 Inefficiency/obsolescence. Some equipment will be rendered obsolete by more
efficient equipment, which reduces the usability of the original equipment.

3. A) Straight line method

Machine Depreciation Straight line Method

Cost 8000

Salvage Value 2400

Useful life in years 5

Year Depreciation Depreciation Accumulated Book Value

Cost Expense Depreciation
1 5600 1120 1120 6880

2 5600 1120 2240 5760

3 5600 1120 3360 4640

4 5600 1120 4480 3520

5 5600 1120 5600 2400

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b) Reducing balance method

Initial Purchase Calculation 1 Depreciation Calculation 2 Book Value

charge
Year 1 8000 x 20%= 1600 6400 - 1600= 4800

Year 2 4800 x 20%= 960 4800 - 960= 3840

Year 3 3840 x 20%= 768 3840 - 768= 3072

Year 4 3072 x 20%= 614 3072 - 614= 2458

Year 5 2458 x 20%= 491.6 2458 - 492= 1966

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