Currant commenced business on 1.10.X2 purchasing fixtures and fittings for £25,000 and a van for £16,000. The fixtures and fittings were estimated to have a useful life of 8 years and a residual value of £1,800. Further fit¬

tings were purchased on 1.11.X5 for £15,200 with nil residual value.

During December 19X6 the van was involved in^an accident and the insurance assessors considered it a write off. A cheque for £3,200 was received in December from the insurers in full settlement. Another van was purchased on 5 January 19X7 at a cost of £18,500. Depreciation policy of Currant is to charge a full year in the year of purchase and none in the year of sale, and to depreciate fixtures and fittings on a straight line basis and vehicles by 25%

reducing balance.

Prepare the ledger accounts for the two years ending 30.9.X6 and 30.9.X7 for each fixed asset together with related provision for depreciation and the sale of asset accounts. Show the balance sheet extract for fixed assets as at the two year ends.

Answers to these questions are to be found at the back of the book.

Further review questions are available in a separate resource pack which is avail¬

able to lecturers.