Milestone company maintains its non-current assets at cost. A provision for depreciation account is used for each type of asset. The company depreciates machinery at the rate of 15% per year while fixtures are depreciated at a rate of 10% using the reducing balance method. Depreciation is to be calculated on assets in existence at the end of each year, giving a full year’s depreciation even if the asset was bought in the course of the year. The following transactions in assets have taken place:  2018 January 1: Bought machinery €3,000, fixtures €500  2018 July 1: Bought fixtures €440  2019 October 1: Bought machinery €4,000  2019 December 1: Bought fixtures €280  The financial year end of the company is 31st December.  You are Required to show:  (a) Machinery account   (b) The fixtures account  (c) The two-separate provision for depreciation accounts

Intermediate Accounting: Reporting And Analysis
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ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
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Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...
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Milestone company maintains its non-current assets at cost. A provision for depreciation account is used for each type of asset. The company depreciates machinery at the rate of 15% per year while fixtures are depreciated at a rate of 10% using the reducing balance method. Depreciation is to be calculated on assets in existence at the end of each year, giving a full year’s depreciation even if the asset was bought in the course of the year. The following transactions in assets have taken place: 

2018 January 1: Bought machinery €3,000, fixtures €500 

2018 July 1: Bought fixtures €440 

2019 October 1: Bought machinery €4,000 

2019 December 1: Bought fixtures €280 

The financial year end of the company is 31st December. 

You are Required to show: 

  1. (a) Machinery account  
  2. (b) The fixtures account 
  3. (c) The two-separate provision for depreciation accounts 
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