1
A company maintains its fixed assets at cost. Depreciation provision accounts for each asset
are kept.
At 31 December 2008 the position was as follows:
Total cost to date Total depreciation to date
£ £
Machinery 94,500 28,350
Office furniture 3,200 1,280
The following additions were made during the financial year ended 31 December 2009:
Machinery £16,000, office furniture £460.
A machine bought in 2005 for £1,600 was sold for £360 during the year.
The rates of depreciation are:
Machinery 20 per cent, office furniture 10 per cent, using the straight line basis, calculated on
the assets in existence at the end of each financial year irrespective of the date of purchase.
You are required to show the asset and depreciation accounts for the year ended 31 December
2009 and the balance sheet entries at that date.