1 A machine cost £40,000 on 1 January 2007. The reducing balance depreciation method is used at 25% per annum. Year end is 31 December. During 2009, it was decided that a straight line method would be...

1

A machine cost £40,000 on 1 January 2007. The reducing balance depreciation method is

used at 25% per annum. Year end is 31 December. During 2009, it was decided that a straight line

method would be more appropriate. At that time, the remaining useful economic life of the

machine was seven years with a residual value of £1,500.

Required:

The accumulated provision for depreciation account for the years 2007 to 2009 inclusive together

with the relevant balance sheet extract on 31 December in each of those years.