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5. A printing business is thinking of updating their equipment. They are current valued in the balance sheet on the 31/12/14 as follow at cost of £486,000, with a provision for depreciation of £222,000
During the year they buy 2 new printing machines
1st May 2015 Machine 1 costing £225,000
1st September 2015 Machine 2 – costs £125,000They are to replace
A photocopier which originally cost £40,000 and had a provision for depreciation of £37,000 which was sold for £5000
An old printing machine – which cost £95,000 had a provision for depreciation of £85, 000 and was sold for scrap at £1,000The company operates a depreciation policy of 20% reducing balance method and depreciate all assets in the first year of purchase and non in the year of sale.
Prepare the following accounts for the year ending 31/12/2015
Machinery at Cost account
Provision for depreciation account
Disposal accountPlease help im so lost!!
Please don’t simply set test questions and expect us to provide an answer. You must have an answer in the same book in which you found the question, and so ask about whatever it is in the answer that you are not clear about – then I will explain.
However, it seems as though you have not watched my free lectures on this, because it is a simple question and everything needed to solve it is explained in detail, with examples, in the lectures. The lectures are a complete free course for Paper FA (F3) and cover everything needed to be able to pass the exam well.
(And do appreciate that although you are expected to know what the entries are in the t-accounts, you cannot ever in the exam be asked to actually write up the t-accounts.)
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