At 1 January 20X8 Garett's non-current asset balances were as follows: Buildings Machinery Cost 241,000 149,600 Accumulated
Question:
At 1 January 20X8 Garett's non-current asset balances were as follows:
Buildings Machinery
Cost 241,000 149,600
Accumulated Depreciation 57,840 71,200
Garett's year end is 31 December and his policy for non current-assets is to provide a full year's depreciation in the year of acquisition, and none in the year of disposal. Depreciation is provided at the following rates:
Buildings Over 25 years, straight line basis
Machinery 20% per annum, reducing balance basis
During the year ended 31 October 20X8, Garett added an extension to the buildings at a cost of 13,600.He also acquired a new machine by paying a cheque for 9,000 and trading in an old machine for 11,000. The machine traded in had been acquired in July 20X6 for 22,000.
Required
a)Calculate at 31 December 20X8, for (i) Buildings and (ii) Machinery, the:
1.total cost
2.accumulated depreciation
3.net book value
b)Prepare the Machinery Disposals Account for the year ended 31 December 20X8. No machine sales took place during the year.