QUESTION 1 Kamisan Enterprise provides for depreciation of its machinery at 20% per annum on cost; it charges for a full year in the year of purchase but no provision is made in the year of...

QUESTION 1
Kamisan Enterprise provides for depreciation of its machinery at 20% per annum on cost; it charges
for a full year in the year of purchase but no provision is made in the year of sale/disposal.
Financial statements are prepared annually to 31 December.
2017
January 1 Bought machine “A” RM12,000
July 1 Bought machine “B” RM9,000
2018
March 31 Bought machine “C” RM11,000
2019
October 8 Sold machine “A” – proceeds RM6,400
November 7 Bought machine “D” RM14,000
2020
February 3 Sold machine “B” – proceeds RM3,500
February 5 Bought machine “E” RM9,700
October 12 Exchanges machine “D” for machine “F” valued at RM8,000

Required:
(a) Prepare the machinery account for the period from 1 January 2017 to 31 December 2020.


(b) Prepare the provision for depreciation on machinery account, for the period from 1 January
2017 to 31 December 2020.


(c) The disposal of machinery accounts showing the profit/loss on sale for each year.