1. Beatrice Bainson runs a business altering and repairing clothes. When she started business on 1 January 2012, she bought a Scoopatitch II sewing machine for GH2,500. She depreciates sewing machines using the straight-line method at a rate of 20% pa, and she charges a full year depreciation in the year of acquisition and none in the year of disposal.

The business has now grown such that she needs a faster machine, and she will upgrade to Scoopatitch V during December 2015. The Scoopatitch salesman has offered her a part exchange deal as follows:

Part exchange allowance for Scoopatitch II GH750

Balance to be paid in cash for Scoopatitch V GH4,850

Required

1. Show the ledger entries for the year ended 31 December 2015 to reflect this transaction. 7 Marks

Show the relevant extracts in the appropriate financial statements