Question

CAAT Traders acquired machinery on 1 July 20.18 for an amount of R175 300. This machinery was only available for use from 1 September 20.18 due to massive tests that needed to be performed first. CAAT Traders’ current financial period ends on 31 May 20.19. According to CAAT Traders’ accounting policy, depreciation on machinery is provided using the unit of production method over it’s the useful life of 5 years according to the following production schedule:
The amount for depreciation expenses to be shown in the statement of profit or loss and other comprehensive income for the year ended 31 May 20.19 will be … (round off your final answer to the nearest Rand)

Answer 1

The depreciation expenses to be shown in the statement of profit or loss and other comprehensive income for the year ended (31-05-2019) is R26,295.

What is depreciation?

Depreciation can be defined as a process in which the monetary (financial) value of an asset decreases or falls over time, especially due to wear and tear.

How to determine the depreciation expenses?

First of all, we would calculate the expected number of units produced by CAAT as follows:

Expected number of units produced = 15,000 + 13,000 + 11,000 + 10,500 + 10,500

Expected number of units produced = 60,000.

Mathematically, the depreciation expenses is given by:

Depreciation expenses = Actual units produced/expected units produced × cost price

Substituting the given parameters into the formula, we have;

Depreciation expenses = 9,000/60,000 × 175,300

Depreciation expenses = R26,295.

Read more on depreciation expenses here: brainly.com/question/25806993

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