Sure, let's break down each part of the question:

(a) Depreciation per year is Sh

Depreciation is calculated using the formula: (Cost of Asset - Salvage Value) / Useful Life.

In this case, the cost of the asset is Sh 375,000, the salvage value is Sh 37,500, and the useful life is 10 years.

So, (375,000 - 37,500) / 10 = Sh 33,750 per year.

(b) Total depreciation to date of sale is Sh

The furniture was purchased on January 1, 2015, and sold on May 1, 2022. That's a total of 7 years and 4 months, or 7.33 years.

So, 33,750 * 7.33 = Sh 247,237.50

(c) The accumulated depreciation at date of sale is Sh

This is the same as the total depreciation to date of sale, so it's Sh 247,237.50.

(d) The book value of the asset at the date of sale is Sh

The book value is calculated as the original cost of the asset minus the accumulated depreciation.

So, 375,000 - 247,237.50 = Sh 127,762.50

(e) The (gain/loss) on sale (disposal) of furniture item to be recognized on sale will be Sh

The gain or loss is calculated as the sale price minus the book value.

So, 150,000 - 127,762.50 = Sh 22,237.50.

Since the sale price is more than the book value, this is a gain.

(f) The balance on the disposal account would be Sh

The balance on the disposal account is the original cost of the asset minus the accumulated depreciation, plus the gain on sale.

So, 375,000 - 247,237.50 + 22,237.50 = Sh 150,000.

Since this is a positive number, it's a debit balance.

Question

Sure, let's break down each part of the question:

(a) Depreciation per year is Sh

Depreciation is calculated using the formula: (Cost of Asset - Salvage Value) / Useful Life.

In this case, the cost of the asset is Sh 375,000, the salvage value is Sh 37,500, and the useful life is 10 years.

So, (375,000 - 37,500) / 10 = Sh 33,750 per year.

(b) Total depreciation to date of sale is Sh

The furniture was purchased on January 1, 2015, and sold on May 1, 2022. That's a total of 7 years and 4 months, or 7.33 years.

So, 33,750 * 7.33 = Sh 247,237.50

(c) The accumulated depreciation at date of sale is Sh

This is the same as the total depreciation to date of sale, so it's Sh 247,237.50.

(d) The book value of the asset at the date of sale is Sh

The book value is calculated as the original cost of the asset minus the accumulated depreciation.

So, 375,000 - 247,237.50 = Sh 127,762.50

(e) The (gain/loss) on sale (disposal) of furniture item to be recognized on sale will be Sh

The gain or loss is calculated as the sale price minus the book value.

So, 150,000 - 127,762.50 = Sh 22,237.50.

Since the sale price is more than the book value, this is a gain.

(f) The balance on the disposal account would be Sh

The balance on the disposal account is the original cost of the asset minus the accumulated depreciation, plus the gain on sale.

So, 375,000 - 247,237.50 + 22,237.50 = Sh 150,000.

Since this is a positive number, it's a debit balance.

Knowee AI · Accepted Answer