Economics - Statement of Profit and Loss Account

Running Head: ECONOMICS 1
ECONOMICS

Running Head: ECONOMICS
Contents
Task A..................................................................................................................... 3
Task 1: Calculation of the depreciation to be charged to Statement of profit and loss Account.........3
Task 2: Carrying amount............................................................................................... 3
Task B: Profitability.................................................................................................... 4
Task C..................................................................................................................... 4
Task D: Cash Conversion Cycle...................................................................................... 5
References................................................................................................................ 7

Running Head: ECONOMICS
Task A
Task 1: Calculation of the depreciation to be charged to Statement of profit and loss
Account
Calculation of the annual depreciation that shall be charged to profit and loss account
Particulars Cost
Depreciation
method
Depreciation
charged
Plant and Machinery
at cost
$
1,53,250.00 Straight line
$
19,156.25 153250/8
Motor vehicle at cost
$
44,000.00 Reducing balance
$
11,000.00
44000*2
0%
Therefore, from the above table it can be stated that the amount of the depreciation on plant
and machinery will be $19156 whereas on motor vehicle will be $11000. Together while
transferring it to the income statement, the balance will be $30156 (Zeidan and Shapir, 2017).
Task 2: Carrying amount
The carrying amount of non-current assets is usually not included in the balance sheet and it
is always lower than the current market value. The formula of carrying amount is
Purchase price – Depreciation – Impairment
In case of plant and machinery the carrying amount that is charged to the statement of the
financial position as at 30th September 2019 are defined below.