#

                                      Transaction Description

                                           Amount (CZK)

                                            Debit (Dr)

                                            Credit (Cr)

                                                                                                  1

Machine purchase on invoice

                                                                                                500



                                                                                                  2

Software purchase – paid by bank

                                                                                                120



                                                                                                  3

Capital improvement of a building

                                                                                                300



                                                                                                  4

Annual depreciation of a machine

                                                                                                 50



                                                                                                  5

Sale of vehicle (NBV 40,000 CZK, sale 60,000 CZK)

                                                                                                 60



                                                                                                  6

Disposal of fully depreciated computer

                                                                                                 25



                                                                                                  7

Machine destroyed (NBV 80,000 CZK, insurance 50,000 CZK)

                                                                                                 80



                                                                                                  8

Capitalization of internally developed software

                                                                                                250



                                                                                                  9

Machine acquired via finance lease

                                                                                                400



                                                                                                 10

Annual depreciation of a building

                                                                                                120





#

                                       Transaction Description

                                                                                                        Amount (CZK)

                                                                                                                     Debit (Dr)

                                                                                                                               Credit (Cr)

1

 Purchase of machinery

                                                             600,000



2

 Annual depreciation expense





Depreciation Example Using the Straight-Line Method
  * Acquisition Cost: 600,000 CZK
  * Residual Value: 0 CZK
  * Useful Life: 5 years


                                               Year

                                      Acquisition Cost (CZK)

                                       Residual Value (CZK)

                                        Useful Life (Years)

                                     Annual Depreciation (CZK)

                                   Book Value at Year-End (CZK)

1






2






3






4






5





___________________________________________________________________________________________________



 Depreciation Example Using the Reducing Balance Method
  * Acquisition Cost: 600,000 CZK
  * Residual Value: 0 CZK
  * Depreciation Rate: 25% annually
  * Method: Reducing Balance


                                               Year

                                     Opening Book Value (CZK)

                                       Depreciation Rate (%)

                                     Annual Depreciation (CZK)

                                     Closing Book Value (CZK)

1





2





3





4





5