XY Ltd provides for depreciation of its machinery at 20% per annum on cost; it charges for a full year in the year of purchase but no provision is made in the year of sale/disposal.

Financial statements are prepared annually to 31 December.

Prepare

(a) The machinery account for the period 1 January 20X5 to 31 December 20X8.

(b) The accumulated provision for depreciation on machinery account, for the period 1 January 20X5 to 31 December 20X8.

(c) The disposal of machinery accounts showing the profit/loss on sale for each year.

(d) The balance sheet extract for machinery at (i) 31 December 20X7 and (ii) 31 December 20X8.

Transcribed Image Text:

20X5 January 1 Bought machine 'A' £10,000 July 1 Bought machine 'B' £6,000.