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BUILDOUT LIMITED Assume that your are working as a Fixed Asset Manager in BUILDOUT LIMITED provides you are in a process of closing the accounts for machinery and its accumulated depreciation. BUILDOUT LIMITED provides depreciation on plant and machinery at 20% per annum on diminishing balance method. On July 1, 2017 following are the balances: Amount Particulars Plant and Machinery Accumulated Depreciation 712,000 24,000 Depreciation is provided from the month of purchase till the month of disposal. It was discovered during 2017-2018 that: A machine which was purchased on January 1, 2017 for 100,000 was traded-in on March 31, 2018 for a new and more sophisticated machine. The disposal was not recorded and the new machine a) was capitalised at 120,000 being the net amount paid to the supplier. The trade-in allowance amounted to 50,000. I was decided to correct the above mistakes while finalising the accounts for the year ended June 30.2018, Only one machine was purchased during the year ended June 30, 2018 costing 60,000. The machine was received in the factory on October 1, 2017 and was installed on January 1, 2018. Required: You are require to prepare Plant and Machinery account and accumulated depreciation account for the year ended June 30, 2018 (Show all workings) Journal Entries Ledgers JOURNAL ENTRIES Debit Credit Date 2018 March 31 Accumulated Depreciation New Machine Loss on Disposal Old Machine Debit Credit Date 2018 January 1 Machine Cash Date 2018 Debit Credit June 30 Depriciation Accumulated Deprecriation Date 2018 Debit Credit June 30 Depriciation Accumulated Deprecriation Journal Entries Ledgers LEDGERS bid Plant and Machinery Alc 71,200 New Machine Old Machine c/d 71,200 0 Accumulated Depreciation Account bld 24,000 c/d 24,000