Assignment Question(s) : Instructions - Please Read Them Carefully
Assignment Question(s) : Instructions - Please Read Them Carefully
Assignment Question(s) : Instructions - Please Read Them Carefully
On your own words, describe the methods that companies can implement to
depreciate plant assets. (2 Marks).
Q2-
A) Current liabilities.
B) Long-term liabilities (2 marks).
1. Straight line method: In this, depreciation per year is = (Cost - Residual value) /
useful life. Here, same amount is charged as depreciation each year. It determines the
estimated salvage value (scrap value) and at the end of its life and then subtract that
net book value of plant assets I.e. on written down value of asset. Hence, value of
depreciation decreases each year. It is also a type of accelerated dept. used to write off
3. Unit of production method: Here, depreciation is charged on the basis of actual unit
produced by plant assets and it's estimated total units produce able in useful life. It is
2)
A) Current Liabilities: current liabilities are those liabilities; the business owners
must settle within one year or otherwise within the operating cycle of balance
sheet. These are the short-term liabilities of business, incurred on the day to day
operations.
Goods purchased from suppliers on credit worth $ 500. This will entail a current
debts or non-current liabilities which are due more than one year. These are the
Took a loan from bank for $ 50,000 at 4% interest repayable after 5 years. This is a
3)
Characteristics of corporations;
A) Corporation has limited liability it means that any loans, credit cards, mortgages or
revolving credit with vendors are sole responsibility of the company. There will be a
limited liability to the shareholders. The liability of shareholders will be limited to the
C) Corporation have their own lifespan. A Corporation has its own element, which
means it has a life expectancy that possibly closes when the directorate and
proprietors vote to break down the business. Usually the corporations have long term
life. Any death or inability of shareholders or employees do not affect the continuity of
business in corporations.
managed by the professionals. A professional will be hired by the owner for the smooth
company.
E) Ownership is based on the number of shares. Any investor has a rate possession in
the company, controlled by separating the quantity of shares they own by the quantity
of exceptional shares.