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)

The Financial Year of Suman’s Business Ends on 30 June
$

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:

Additional Machinery Purchases During the Year Ended 30th June 2,020

$

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

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

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-

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

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