You are required to answer the following four questions:

(a) Royston’s business purchased a new machine (with a purchase price of £18,000) on 1 January 2024.

The cost of delivery was £500 and Royston also spent £1,700 on its installation. On 1 July 2024, the machine broke down and it cost £900 to repair. Royston charges depreciation at the rate of 20%

per year using the straight-line method, on a monthly basis. What will be the carrying amount of the machine in Royston’s balance sheet as at his financial year ended 31 December 2024?

(b) On 1 September 2025, Imre’s business traded in a car which it had originally bought for £24,000 on 1 September 2023. The business had been depreciating the car using the reducing balance method at the rate of 35% per year. The list price of the new car was £29,950 and Imre paid the garage with a cheque for £19,500 in full settlement. His business’s financial year end is 31 August. What was the profit or loss on the disposal of the old car?

(c) On 5 December 2025, R. Gough’s business sold a machine for £20,000 cash. The machine had originally cost £37,750. Gough reported a loss of £6,425 on the disposal. What was the accumulated depreciation on the machine as at the date of disposal?

(d) Hinchcliffe’s business produces its financial statements to 31 May each year. On 1 June 2023, he purchased a machine for £200,000 and started to depreciate it at 15% per annum on the reducing balance basis. As of 1 June 2026, he estimated the machine’s remaining useful life to be eight years, with no residual value, and changed the basis of depreciation to the straight-line method. What will be the depreciation charge (to the nearest £1) on this machine in the financial statements of Hinchcliffe’s business for the year ended 31 May 2027?