Hi, I'm doing a practise Sage paper and it's asking me to set up the accounts within Sage. I've got half way through but I'm stuck on the depreciation question and I need some help!
The information I have been given is -
- Nominal Ledger Account Balances as at 31/12/2011
Debit | Credit
Motor Vehicles at cost (1 Delivery vehicle) - £20000
Motor Vehicle Depreciation - £18500
Computer & Office Equipment at cost - £4800
Computer & Office Equipment Depreciation - £3200
Racking & Shelving at Cost - £2000
Racking & Shelving Depreciation - £1800
- Motor Vehicles are depreciated over four years based on cost.
- Computer and Office Equipment is deprecited at 20% per annum based on cost.
- Racking & Shelving are depreciated over 10 years based on cost.
- A full years depreciation is taken in the year of purchase. No depreciation is charged in year of sale.
The month is January 2012 which is the start of the financial year.
I understand how the depreciation amounts of £3200 and £1800 were worked out but I'm not sure how the Motor Vehicle depreciation was worked out. And also what dates would I put in for the date purchased?
It wants me to set up the opening balances as at 31.12.2011 then underneath it gives me the additional information about the depreciation. Later on it says, "The Cheque Book Revealed :
2nd Jan - Paid cheque 940 for £20,000. This was for the balance of the cost of a new vehicle. £600.00 represented the vehicle tax for 6 months to 30 June 2012. The old vehicle had been traded in against the new vehicle. The total cost of the new vehicle was £22,000 (excluding the vehicle tax) and we had been allowed £2,600 as a trade in for the old vehicle. (There was no VAT on any part of the whole transaction)"
So I can only assume I enter the nominal balances, then add the depreciation for 2012? Then use the Fixed Assets Register to add the new vehicle?
Using "record" in the fixed asset register function, you can set up, say, the racking, using £2000 as cost and £200 as NBV. The software then calculates that the depn to date is £1800. Once you have entered the rate details, it will then show £16.67 as the next posting which is for one month.
I assume the paper only wants you to set up the Fixed Asset Register as it doesnt give you enough information to do the journal to the nominal codes.. for this you would need all the opening balances, like for debtors an creditors etc.. otherwise your journal wouldn't balance.
