Question 5

A business has a financial year end of 31 December. A machine is bought for $5,000 on 1 January 2016. It is to be depreciated at the rate of 30% using the Reducing Balance Method.

You are required to show records for the first three (3) years for the following:

(a) Machine Account (2 marks)

(b) Accumulated Provision for Depreciation: Machine (9 marks)

(c) Profit and Loss Account (6 marks)

(d) Extract from the Statement of Profit or Loss for the years ending 31 December..

(3 marks)