IGCSE Accounting Paper-2: Specimen Questions with Answers 129 - 129 of 189
Question 129
Describe in Detail
Essay▾The financial year of Suman’s business ends on 30 June. On 1 July 2,019 balances in Suman’s ledger included the following. (Marks 10)
| $ | |
Machinery | 60,000 |
Provision for depreciation on machinery | 15,000 |
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 2,020 were:
$ | |
1st October 2,019 | 40,000 |
31st March 2,020 | 20,000 |
Purchase on 1st October 2,019 was paid for by cheque and that on 1st July 2,020 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
| Date | Details | $ | Date | Details | $ |
2,019 July 1 | Balance b/d | 60,000 | 2,019 June 30 | Balance c/d | 120,000 |
Oct 1 | Bank A/c | 40,000 | |||
March 31 | Bank A/c | 20,000 | |||
120,000 | 120,000 | ||||
2,020 July 1 | Balance b/d | 120,000 |
Provision for Depreciation A/c
Date | Details | $ | Date | Details | $ |
2,019 June 30 | Balance c/d | 30,150 | 2,019 July 1 | Balance b/d | 15,000 |
June 30 | P&L A/c | 15,150 | |||
30,150 | 30,150 |
Provision for Depreciation-
On 60,000@15% for 12 months | $ 9,000 | |
On 40,000@15% for 9 months | $ 5,400 | |
On 20,000@15% for 3 months | $ 750 | |
$ 15,150 |