2018 1 Q1 Income statement

[@chimammeje2388]

Hello Maurice...I remember watching an earlier video where you added the figure for accumulated depreciation for vehicle with the figure from straight line calculation... so that would have been 4000 + 5000 In this exercise, you only added the calculated depreciation cost of 5000 How do I know when to use only the calculated cost of depreciation vs combining with accumulated depreciation to form one figure

[@mauricesheridan6514]

Chima, In relation to this question there is no depreciation expense calculated in the table, so that is the process of creating the depreciation expense ($5,000). Where I would have added this number to, would have then been in the balance sheet. Add this calculation to the accumulated depreciation to show the full amount related to that asset. So depreciation appears in the Income Statement as an expense related to that period and in the Balance Sheet as negative asset. Hope this helps

[@chimammeje2388]

@@mauricesheridan6514 Yes it does, thanks!

[@hovd817]

The Vehicle has been purchased two years before the period or 5000 * 2 = 10,000 for Depreciation expense. Isn't it ?

[@mauricesheridan6514]

HOVD we are only calculating the depreciation for one year, there is already accumulated depreciation in the balance sheet for the car calculated in the previous year, so only $5,000. Hope this helps

[@hovd817]

@@mauricesheridan6514 It does help, thank you Sir.

[@majdismaiel9950]

Annual Deprecation is 5000 , for 2015 it should be 5000*9/12=3750 For 2016 it should be 5000 For 2017 as of 31 Mar it should be 5000*3/12=1250 Isn't it ? Thank you

[@mauricesheridan6514]

The requirement is that we needed to calculate the depreciation for one year only, that being from 1 April 2016 to 31 March 2017. You do not need to calculate on calendar years, or calculate the depreciation for the previous year. The accumulated depreciation on line three should have been 5,000, an error by the question preparer. I admire you astuteness in reading the question. Hope this helps.