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A company maintains its fixed assets at cost. Depreciation provision account is prepared using 12%...

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Accounting

A company maintains its fixed assets at cost. Depreciation provision account is prepared using 12% per annum on straight line method for machinery and 10 % for fixtures, using reducing balance method. Full year depreciation is charged only on assets in use at the end of the year irrespective of the number of months the asset has been used for a particular year. The following transactions took place during the year:

1990 1st January,Bought machinery 640,000, Fixtures 100,000.

1st January,Fixtures200,000

19911st October,Bought machinery720,000

1st DecemberBought fixtures 50,000

You are required to prepare:

i. The machinery account

ii. The Fixtures account

iii. The provision for depreciation

iv. The balance sheet extract.

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