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Chapter 21 Depreciation 21.16A A company maintains tion account is used for eac per annum, and fixtures Depreciation is to be cal company maintains its

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Chapter 21 Depreciation 21.16A A company maintains tion account is used for eac per annum, and fixtures Depreciation is to be cal company maintains its non-current assets at cost. An accumulated provision for deprecia. is used for each type of asset. Machinery is to be depreciated at the rate of 15 per cent and fixtures at the rate of 5 per cent per annum, using the reducing balance method. stion is to be calculated on assets in existence at the end of each year, giving a full year's ariation even though the asset was bought part of the way through the year. The following transactions in assets have taken place: 2019 1 January Bought machinery 2,800, fixtures 290 1 July Bought fixtures 620 2020 1 October Bought machinery 3,500 1 December Bought fixtures 130 The financial year end of the business is 31 December You are to show: (a) The machinery account. (6) The fixtures account. The two separate accumulated provision for depreciation accounts. The non-current assets section of the balance sheet at the end of each year, for the years ended 31 December 2019 and 2020. in rate of 25 per cent per annum, straight line method, count and the accu- v cal. Write him a letter, using fictitious names and addresses, which defines depreciation and explains why his view is incorrect. 21.25A On 31 March 2019 Dixie's business traded-in a machine (a Z-15 model) which it had origi. nally purchased on 1 April 2016 for 19,000. Dixie had depreciated the Z-15 at 10 per cent per annum using the straight-line method. Dixie part-exchanged the Z-15 for a newer model (the Z-18). The vendor's list price for the Z-18 was 32,000 but Dixie only paid 20,000 plus the trade-in in full settlement. Required: What was the profit or loss on the disposal of the Z-15 in Dixie's Income Statement for the financial year to 31 March 2019? 21.26 XY Ltd provides for depreciation of its machinery at 20 per cent per annum on cost; it! charges for a full year in the year of purchase but no provision is made in the year of saleldicnncal

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