# Sarah Glass Practice exam unit 5

AAT Student Posts: 17 Dedicated contributor ? ? ?
Hi

i was wondering if anyone has done this practice exam in osbourne books, ive always struggled with depreciation and question 1.6 asks me to show the net book value of the fixed assets held at 30th april 2004

these are the figures we are given

Freeholdd premises at cost £104,000
Less Depreciation to date £20,800

Fixtures and fittings at cost £22,750
Less Depreciation to date £13,650

Premises are to be depreciated at 2% per annum on cost and
Fixtures and fittings at 10% per annum on cost

so this is what i have worked out

Fixed Assets Cost £ Provision for depn £ Net £

Premises 104,000 20,800 83,200
Fixtures and Fittings 22,750 13,650 9,100

so would the netbook value of the fixed assets be £92,300 (83,200+9,100)?

thanks

• Registered Posts: 2,453
Looks good to me, but are the given figures for the year ending 30th April 2004 or do you still need to calculate the depreciation for the year?
• AAT Student Posts: 17 Dedicated contributor ? ? ?
no, the given figures are for 30th April 2003, so would my answer below be correct then?

thanks
• Registered Posts: 2,453
Hi,

In that case you will need to calculate one year of depreciation and add that to the depreciation you already calculated.

The depreciation amounts can be found by looking at these two lines:
Premises are to be depreciated at 2% per annum on cost and
Fixtures and fittings at 10% per annum on cost

The cost of the fixed asset is the original value the company paid when they purchased the asset.

The provision for depreciation is the total of depreciation of all previous years and at year end, including this years depreciation.

The net book value is the amount the asset is worth now to the company, so that is the original cost minus depreciation to date.

Does this help?

Cheers,
Rinske
• AAT Student Posts: 17 Dedicated contributor ? ? ?
Hi

I think i understand as follows

In 2003
The original cost of premises is £104,000
and depreciation for year is 20,800 (2%)

so in 2004 the total depreciation is £41,600

so net book value at 30 April 2004 is £104,000 minus £41,600 equals £62,400

is that correct?
• AAT Student Posts: 17 Dedicated contributor ? ? ?
sorry

i just been reading over my answers again and i have realised my mistake

im pretty sure now that this is what the answer should be

Freehold premises as cost £104,000
Depreciation to date £22,880 (20,800 + (2% * 104,000)
Net £81,120

Fixtures and Fittings at cost £22,750
Depreciation to date £15,925 (13,650 = (10%*22,750)
Net £ 6,825
Total Net Value = £87,945 (81,120+6,825)

hope this is right now ?

thanks
• Registered Posts: 2,453
Hi,

That looks alright to me!

Cheers,
Rinske