The biscuit machine in question C8.1 was sold at the end of Year 4 for a price of £3,000.

Required

(a) Prepare the spreadsheet for Year 4 analysing the transactions and events of the year.

(b) Prepare the statement of financial position (balance sheet) at the end of Year 4 and the income statement (profit and loss account) for Year 4.

(c) Explain to a non-accountant the accounting problems of finding that the asset was sold for

£3,000 when the original expectation was £2,000.

Chapter 8 Non-current (fixed) assets 227 AppendixLO1