Required:

(a) Prepare the following ledger accounts for the year ended 31 December 2019: (i) Provision for depreciation of equipment account (ii) Equipment disposal account

(b) Calculate the Net Book Value (NBV) of Equipment and Office Computers as at 31 December 2019.

QUESTION ONE On 31 December 2018 the following extract was taken from the balance sheet of BBD. Cost Accumulated NBV Non-current assets Equipment Office Computers Total 60 000 8 000 68 000 depreciation K 24 000 5 600 29 600 38 000 2 400 38 400 The following transactions took place during the year ended 31 December 2019: 1. On 31 May 2019, equipment purchased on 1 August 2016. at a cost of K28 000, was sold for K10 000. Payment was received by cheque. 2. On 1 June 2019, new equipment was purchased at a cost of K35 000. 3. On 20 June 2019, office computers were purchased for K800. BBD has the following depreciation policy. Equipment is depreciated at the rate of 20% per annum using the straight-line method. Office computers are depreciated at the rate of 25% per annum using the diminishing (reducing) balance method. A full year's depreciation is charged on equipment and office computers in the year of purchase. No depreciation is charged on equipment in the year of sale