# Help! Extended Trial Balance question

Registered Posts: 7 Regular contributor ⭐ ? ⭐
Can anyone explain how you deal with accumulated depreciation in the ETB? The question states: Plant & machinery - cost £28,450 Acc. dep. £21,700
Motor vehicles - cost £14,000 Acc. dep. £8,000
Whilst preparing accounts for the year you discover the following:
b) plant & machinery should be depreciated at a rate of 20% using the reducing balance method
c) motor vehicles should be depreciated at a rate of 25% on cost [presumably straight line]
This suggests the depreciation provision is wrong (applying these rates you don't get either of these figures), but nowhere in the question does it say when the plant and vehicles were purchased. So what figures actually go into the ETB? Journals are required for other parts of the question - would a journal be necessary here? Don't think so, but need to be sure.
I'm okay on the rest of the question - this is a desperate first post in the hope that someone can kindly help!

• Registered Posts: 1,624
I agree that it's not clear but I would suggest that it means that the depreciation has been calculated incorrectly or they have given you the b/f figures and expect you to do this year's calculations.

However you are right to say that 'on cost' means straight line.
• Registered Posts: 711
sgtpepper wrote: »
Can anyone explain how you deal with accumulated depreciation in the ETB? The question states: Plant & machinery - cost £28,450 Acc. dep. £21,700
Motor vehicles - cost £14,000 Acc. dep. £8,000
Whilst preparing accounts for the year you discover the following:
b) plant & machinery should be depreciated at a rate of 20% using the reducing balance method
c) motor vehicles should be depreciated at a rate of 25% on cost [presumably straight line]
This suggests the depreciation provision is wrong (applying these rates you don't get either of these figures), but nowhere in the question does it say when the plant and vehicles were purchased. So what figures actually go into the ETB? Journals are required for other parts of the question - would a journal be necessary here? Don't think so, but need to be sure.
I'm okay on the rest of the question - this is a desperate first post in the hope that someone can kindly help!

If they are not asking you to correct this by means of a journal then the figures they have given you will be the opening balances. The depreciation amounts may not seem correct as not all vehicles or machinery may have been bought in the same year. You will need to calculate the depreciation according to those figures.
• Registered Posts: 7 Regular contributor ⭐ ? ⭐
Thanks for both replies, I was probably over-complicating it and looking for something not required (it wouldn't be the first time!).
• Registered Posts: 711
No worries, just remember that the exams/skills tests aren't trying to catch u out so there won't be any hidden questions.
• Registered Posts: 366
The cost will be a debit in the extended trial balance and the acc dep'n a credit you calculate this years depreciation
machinery - 1350
motor vehicle - 1500
Those amounts get credited to the appropriate accumalated dep/n in the adjustments....
The accumulated dep'n is then a credit on the balance sheet
eg motor vehicle 9500
and the total dep'n 2850 is a debit in the profit and loss a/c
thats how i would do it anyhow......