QUESTION ONE

The following balances were included in the statement of financial position of Big Movers Limited as at

1st July 2011

Cost

Shs.000

Accumulated

Depreciationsh.000

Netbookvalue

Sh.000

Land

40,000

-

40,000

Buildings

22,000

8,000

14,000

PlantandMachinery

16,000

6,000

10,000

Motorvehicles

6,000

2,000

4,000

During the year ended 30 June 2012, the following transactions took place

1.On 1 Jan 2012, a plant that had cost sh.3,000,000 and had acumulative depreciation of 2,300,000

as at 30th June 2011 was sold for sh.500,000. A new plant was then purchased at a cost of sh.

4,000,000.

2.On 1Jan 2012, a professional valuer was engaged and the buildings were-valued at Sh.

30,000,000

3.On 1st April 2012,a motor vehicle was purchased at Sh.300,000.part of the purchase price was

settled by exchanging another motorvehicle at an agreed value of sh.120,000 and the balance

paid for in cash.The trade in vehicle had cost sh.200,000 and had a netbook value of sh.100,000

as at 30th June2011

The company charges depreciation at the following rates

Asset

Rate per annum

Land

-

Buildings

2% on cost

Plant and machinery

15%on cost

Motorvehicles

20%on cost

A proportionate charge is made in the year of purchase,sale or revaluation of an asset.

Required

1)Buildings account

2)Provision for depreciation on buildings account

3) Plant and machinery account

4)Provision for depreciation on Plant and Machinery account

5)Motorvehicles account

6)Provision for depreciation on Motorvehicles account

7)Property Plant and equipment movement schedule for the year ended 30th June 2012