1
A company maintains its fixed assets at cost. Accumulated provision for depreciation
accounts are kept for each asset.
At 31 December 2008 the position was as follows:
Total Cost To Date Total Depreciation To Date
£ £
Machinery 52,950 25,670
Office furniture 2,860 1,490
The following transactions were made in the year ended 31 December 2009:
(a) Purchased – machinery £2,480 and office furniture £320
(b) Sold machinery which had cost £2,800 in 2005 for £800
Depreciation is charged, on a straight line basis, at 10% on machinery and at 5% on office furniture
(a)
on the basis of assets in use at the end of the year irrespective of the date of purchase.
Required:
Show the asset and accumulated provision for depreciation accounts for the year 31 December
2009 and the relevant balance sheet entries at that date.