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Accounting for Colin's Cars.
Member rating: No Rating | Words: | Submitted: Mon Dec 22 2003
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Contents Trials Balance for Colin's Cars 1 Balance Sheet for Colin's Cars 2 Profit and Loss Account for Colin's Cars 3 Letter to Colin explaining the methods of depreciation 4 - 6 Accounting Conventions 7 - 8 Bibliography 9 Reference 10 Dear Colin, Re: Depreciation methods I understand that you wish to expand your business to incorporate a hire car service. As you are aware that you need to depreciate your fleet, there are a few methods of depreciations, they are Straight Line Method, Reducing Balance Method and Sum of the Year's Digits Depreciation. Straight Line Method: This spreads the cost of the asset equally over its period of use. G Black (2000: 51) suggested to use the following formula for calculating depreciation under this method: Cost - Estimated residual value Useful economic life in years Reducing Balance Method: This spreads the cost of the asset over its period of use in a different way. More depreciation is charged in the early periods of use than in the later one....
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