IGCSE Accounting Paper-2: Specimen Questions with Answers 128 - 128 of 189

Question 128

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The financial year of Suman’s business ends on 30 June. On 1 July 2019 balances in Suman’s ledger included the following. (Marks 10)

The financial year of Suman’s business ends on 30 June. The financial year of Suman’s business ends on 30 June.
$
Machinery60000
Provision for depreciation on machinery15000

The following additional information is also provided.

1. Suman depreciates his machinery at the rate of 15 % per annum on cost. Depreciation on new machinery is calculated from the date of purchase.

2. Additional machinery purchases during the year ended 30th June 2020 were:

Additional machinery purchases during the year ended 30th June 2020 Additional machinery purchases during the year ended 30th June 2020
$
1st October 201940000
31st March 202020000

Purchase on 1st October 2019 was paid for by cheque and that on 1st July 2020 was paid in cash.

3. There were no sales of equipment during the year.

(b) Enter the above transactions in Suman’s ledger accounts below.

Machinery A/c

Provision for Depreciation A/c

Explanation

Machinery A/c

Machinery A/cMachinery A/c
DateDetails$DateDetails$
2019 July 1Balance b/d600002019 June 30Balance c/d120000
Oct 1Bank A/c40000
March 31Bank A/c20000
120000120000
2020 July 1Balance b/d120000

Provision for Depreciation A/c

Provision for Depreciation A/cProvision for Depreciation A/c
DateDetails$DateDetails$
2019 June 30Balance c/d301502019 July 1Balance b/d15000
June 30P&L A/c15150
3015030150

Provision for Depreciation-

Provision for DepreciationProvision for Depreciation
On 60000@15 % for 12 months$9000
On 40000@15 % for 9 months$5400
On 20000@15 % for 3 months$750
$15150

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