1
A company starts in business on 1 January 2008, the financial year end being 31 December.
You are to show:
(a) The machinery account.
(b) The provision for depreciation account.
(c) The balance sheet extracts for each of the years 2008, 2009, 2010, 2011.
The machinery bought was:
2008 1 January 1 machine costing £1,200
2009 1 August 2 machines costing £672 each
1 November 1 machine costing £1,920
2011 1 May 1 machine costing £300
Depreciation is over eight years, using the straight line method, machines being depreciated for
the proportion of the year that they are owned.