The information below was extracted from the books of Let Your Light Shine Enterprise: Non-current Asset Cost (GH¢) Date of Acquisition Date of Disposal Proceed from Disposal (GH¢) Machine A 30,000 03/01/15 31/08/17 18,000 Machine B 40,000 01/07/15 - - Machine C 60,000 30/09/15 01/07/17 50,000 Machine D 80,000 01/04/16 - - Additional information: a) As per the enterprise’s accounting policy, depreciation charged is pro-rated on the basis of months of use. All acquisitions and disposals are on cash basis; b) Machines A and B are depreciated at a rate of 20% on reducing balance basis while Machines C and D at 10% on straight line basis; and c) Accounts are prepared to 31st December every year. You are required to: I. Show the relevant accounts for machinery for years to 31st December, 2017; II. Show the Income statement and the statement of financial position for each of the relevant years to 31stDecember, 2017.
The information below was extracted from the books of Let Your Light Shine Enterprise: Non-current Asset Cost (GH¢) Date of Acquisition Date of Disposal Proceed from Disposal (GH¢) Machine A 30,000 03/01/15 31/08/17 18,000 Machine B 40,000 01/07/15 - - Machine C 60,000 30/09/15 01/07/17 50,000 Machine D 80,000 01/04/16 - - Additional information: a) As per the enterprise’s accounting policy, depreciation charged is pro-rated on the basis of months of use. All acquisitions and disposals are on cash basis; b) Machines A and B are depreciated at a rate of 20% on reducing balance basis while Machines C and D at 10% on straight line basis; and c) Accounts are prepared to 31st December every year. You are required to: I. Show the relevant accounts for machinery for years to 31st December, 2017; II. Show the Income statement and the statement of financial position for each of the relevant years to 31stDecember, 2017.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The information below was extracted from the books of Let Your Light Shine Enterprise:
|
Non-current Asset |
Cost (GH¢) |
Date of Acquisition |
Date of Disposal |
Proceed from Disposal (GH¢) |
|
Machine A |
30,000 |
03/01/15 |
31/08/17 |
18,000 |
|
Machine B |
40,000 |
01/07/15 |
- |
- |
|
Machine C |
60,000 |
30/09/15 |
01/07/17 |
50,000 |
|
Machine D |
80,000 |
01/04/16 |
- |
- |
Additional information:
a) As per the enterprise’s accounting policy, depreciation charged is pro-rated on the basis of months of use. All acquisitions and disposals are on cash basis;
b) Machines A and B are depreciated at a rate of 20% on reducing balance basis while Machines C and D at 10% on straight line basis; and
c) Accounts are prepared to 31st December every year.
You are required to:
I. Show the relevant accounts for machinery for years to 31st December, 2017;
II. Show the Income statement and the statement of financial position for each of the relevant years to 31stDecember, 2017.
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