A company whose accounting year is the financial year, purchased on 1 April 2018 machinery costing 30,000. It purchased further machinery on 1st October 2018 costing 20,000 and on 1* July 2019 costing 10,000. On 1st January 2020 the machinery installed on 1* April 2018 became obsolete and was sold for 3000. Show how Machinery account, Depreciation account, provision for depreciation account and Asset disposal account would appear in the books of the company for 2 years, it being given that machinery was depreciated by fixed installment method @10% per annum.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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SA company whose accounting year is the financial year, purchased on 1
April 2018 machinery costing 30,000. It purchased further machinery on
1s* October 2018 costing 20,000 and on 1 July 2019 costing 10,000. On
1st January 2020 the machinery installed on 1% April 2018 became obsolete
and was sold for 3000. Show how Machinery account, Depreciation account,
provision for depreciation account and Asset disposal account would appear
in the books of the company for 2 years, it being given that machinery was
depreciated by fixed installment method @10% per annum.
Transcribed Image Text:SA company whose accounting year is the financial year, purchased on 1 April 2018 machinery costing 30,000. It purchased further machinery on 1s* October 2018 costing 20,000 and on 1 July 2019 costing 10,000. On 1st January 2020 the machinery installed on 1% April 2018 became obsolete and was sold for 3000. Show how Machinery account, Depreciation account, provision for depreciation account and Asset disposal account would appear in the books of the company for 2 years, it being given that machinery was depreciated by fixed installment method @10% per annum.
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