a. On 1st July, 2015 COVID- 19 Ltd (COVID- 19) purchased a plant for GH195,000 and spent GH5,000 on its installation. COVID- 19 decided to provide depreciation at 7.5% per annum, using written down value method. On 30th November, 2018 the plant was dismantled at a cost of GH2,500 and then sold for GH50,000.

On 1st December, 2018 COVID- 19 acquired and put into operation a new plant at a total cost of GH380,000. Depreciation was provided on the new plant on the same basis as had been used in the case of the earlier plant. COVID- 19 closes its books of account every year on 31st March. Prepare Plant Account and Depreciation Account for four accounting years ended 31st March. 2019. (14 marks)

b. If a company continues to use equipment past the useful life that was assumed in determining the depreciation, there will be no depreciation expense in the additional years. Is this statement true? Explain. (10 marks)

c. The value of a plant is depreciating at 2.5% per annum and is GH631,750 after two years. What was its original price? (6 marks)