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parker brown · Jun 11, 2012, 02:08 AM

the business has only one computer.The computer was taken over by Partner A on the 1 December 2006 at the value of R1000. It was replaced by a new computer on the same day but the payment will be made only in March. The cost price of the new computer was R11 000. No entries have been put through to record any of these transactions.
The depreciation rate on the computers is 20% per annum on cost.
Financial year starts on the 1 march 2006 and ends on the 28 February 2007

paraclete · Jun 11, 2012, 05:30 AM

Originally Posted by parker brown

the business has only one computer.The computer was taken over by Partner A on the 1 december 2006 at the value of R1000. it was replaced by a new computer on the same day but the payment will be made only in March. The cost price of the new computer was R11 000. no entries have been put through to record any of these transactions.
The depreciation rate on the computers is 20% per annum on cost.
Financial year starts on the 1 march 2006 and ends on the 28 february 2007

What is the question here?

Depreciation is calculated on actual cost, If you used a computer for part of the year that cost should be recorded as depreciation, if it was scraped on a particular date that is the date of disposal. Accrual accounting adjusts subsequent transactions as if they had occurred on a particular date, cash transactions ignore this