You are a member of the finance team of Hoverboards Ltd, a medium-sized company that sells ‘rideables’ and other electronic gadgets online, that it imports from overseas. A significant component of the Statement of Financial Position for Hoverboards Ltd is the computer equipment used in the business.
The company currently depreciates computer equipment at 30% on a reducing balance basis. On 1 February 2017, the company acquired new laptops at a cost of £90,000.
The year-end for Hoverboards Ltd is 31 January 2018.
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlinesOrder Paper Now
a) Explain how the recognition of depreciation is an illustration of the accruals concept.
b) For the new laptops, calculate the following for the years ended 31 January 2018 and 31 January 2019:
i. Depreciation expense for the year.
ii. Net book value at the year end.