Singh Enterprises, which started business on 1 January 2015, has a reporting period to 31 December and

Question:

Singh Enterprises, which started business on 1 January 2015, has a reporting period to 31 December and uses the straight-line method of depreciation. On 1 January 2015, the business bought a machine for £10,000. The machine had an expected useful life of four years and an estimated residual value of £2,000. On 1 January 2016, the business bought another machine for £15,000. This machine had an expected useful life of five years and an estimated residual value of £2,500. On 31 December 2017, the business sold the first machine bought for £3,000.

Required:

Show the relevant income statement extracts and statement of financial position extracts for the years 2015, 2016 and 2017.

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