Briefly explain the nature and the purpose of accounting for depreciation (5 marks) The chief accountant of Jitegemea Ltd has encountered difficulties while accounting for fixed assets and the related depreciation in the company's draft accounts for the year ended 30th April 2000. He has decDecided to seek your professional advice and presented the following balances of fixed assets as at 1 st may 1999. Acquisition cost Accumulated depreciation Furniture 900000 Trucks 3525000 Plant and machinery 7387500 Land 2775000 Buildings 2925000 300000 1470000 4462500 292500 Depreciation rate 12.5 25 10 Nil 2.5 The following additional information was available: 1. It is the company's policy to write off costs of the assets using the above percentage on cost. 2. 3. 4. 5. 6. Depreciation is fully charged on the year of acquisition and non in the year of disposal. A three year old machine acquired for Sh 187500 was sold for Sh 15750. It has been decided to adjust and charge depreciation on buildings at 4 % A used delivery van purchased three years ago for Sh 248250 was traded in during the year at the value of 157500 in part exchange of the new delivery truck costing Sh 450000 Land, buildings and machinery were acquired for Sh 1350000 from a company that went out of business. At the time of acquisition Sh. 90000 was paid to have the assets by a professional qualified valuer. The revaluation indicated the following market value: Sh Land 900000 Buildings 600000 Machinery 300000 Required: Reschedule of movement of fixed assets as requested by the chief accountant for inclusion in the company's accounts for the year ended 30 April 2000. (10 marks)