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J. Mwakisha, a contractor, started business on 1 January 2006. Purchases and disposals of machines over the subsequent three years were as follows: Date of Purchase Cost (Shs.) 5,000,000 2,500,000 7,000,000 Machine Date of Disposal proceeds (Shs.) Disposal 1 January 2006 I January 2006 1 January 2008 The machines are depreciated on straight line basis using a rate of 20% per annum MAI --- --- MB 2 1 January 2008 900,000 МС 3 --- --- Required: I. Write up the following accounts as they would appear in J. Mwakisha's books for the years 2006, 2007 and 2008 Machines at cost account: II. Provision for depreciation on machine account; IV. III. Disposal of machines account. Using the information given at the beginning of this question, show a computation of the depreciation for the year 2006, 2007 and 2008: based on the rate of depreciation of 20% on reducing balance basis. (Individual accounts are not required) V.

J. Mwakisha, a contractor, started business on 1 January 2006. Purchases and disposals of machines over the subsequent three years were as follows: Date of Purchase Cost (Shs.) 5,000,000 2,500,000 7,000,000 Machine Date of Disposal proceeds (Shs.) Disposal 1 January 2006 I January 2006 1 January 2008 The machines are depreciated on straight line basis using a rate of 20% per annum MAI --- --- MB 2 1 January 2008 900,000 МС 3 --- --- Required: I. Write up the following accounts as they would appear in J. Mwakisha's books for the years 2006, 2007 and 2008 Machines at cost account: II. Provision for depreciation on machine account; IV. III. Disposal of machines account. Using the information given at the beginning of this question, show a computation of the depreciation for the year 2006, 2007 and 2008: based on the rate of depreciation of 20% on reducing balance basis. (Individual accounts are not required) V.

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.6E
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QUESTION TWO J. Mwakisha, a contractor, started business on 1 January 2006. Purchases and disposals of machines over the subsequent three years were as follows: Machine Cost (Shs.) 5,000,000 2,500,000 7,000,000 Date of Date of Disposal proceeds (Shs.) Purchase Disposal 1 January 2006 I January 2006 1 January 2008 The machines are depreciated on straight line basis using a rate of 20% per annum MAI --- MB 2 1 January 2008 900,000 МС 3 --- --- Required: Write up the following accounts as they would appear in J. Mwakisha's books for the years 2006, 2007 and 2008 Machines at cost account: I. I. Provision for depreciation on machine account; Disposal of machines account. Using the information given at the beginning of this question, show a computation of the depreciation for the year 2006, 2007 and 2008: based on the rate of depreciation of 20% on reducing balance basis. (Individual accounts are not required) III. IV. V.
Transcribed Image Text:QUESTION TWO J. Mwakisha, a contractor, started business on 1 January 2006. Purchases and disposals of machines over the subsequent three years were as follows: Machine Cost (Shs.) 5,000,000 2,500,000 7,000,000 Date of Date of Disposal proceeds (Shs.) Purchase Disposal 1 January 2006 I January 2006 1 January 2008 The machines are depreciated on straight line basis using a rate of 20% per annum MAI --- MB 2 1 January 2008 900,000 МС 3 --- --- Required: Write up the following accounts as they would appear in J. Mwakisha's books for the years 2006, 2007 and 2008 Machines at cost account: I. I. Provision for depreciation on machine account; Disposal of machines account. Using the information given at the beginning of this question, show a computation of the depreciation for the year 2006, 2007 and 2008: based on the rate of depreciation of 20% on reducing balance basis. (Individual accounts are not required) III. IV. V.
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