A company maintains its fixed assets at cost. Depreciation provision accounts, one for each type of asset,
Question:
A company maintains its fixed assets at cost. Depreciation provision accounts, one for each type of asset, are in use. Machinery is to be depreciated at the rate of 12% per cent per annum, and fixtures at the rate of 10 per cent per annum, using the reducing balance method.
Depreciation is to be calculated on assets in existence at the end of each year, giving a full year’s depreciation even though the asset was bought part of the way through the year. The following transactions in assets have taken place:
You are to show:
(a) The machinery account.
(b) The fixtures account.
(c) The two separate provision for depreciation accounts.
(d) The fixed assets section of the balance sheet at the end of each year, for the years ended 31 December 19X5 and 19X6.
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