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 none in the year of sale/disposal.

Financial statements are prepared annually to 31 December.

Prepare

(a) The machinery at cost account for the period 1 January 2018 to 31 December 2021.

(b) The accumulated depreciation on machinery account, for the period 1 January 2018 to 31 December 2021.

(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 2020 and (ii) 31 December 2021.

Transcribed Image Text:

2018 January 1 July 1 2019 March 31 2020 October 7 November 5 2021 February 4 February 6 October 11 Bought machine 'A' 10,000 Bought machine 'B' 6,000. Bought machine 'C' 8,000 Sold machine 'A' - proceeds 5,500 Bought machine 'D' 12,000 Sold machine 'B' - proceeds 3,000 Bought machine 'E' 9,000 Exchanged machine 'D' for machinery valued at 7,000