The following non-current assets are bought by C. Brewer for use in her business on 1.1.X0.
|
|
Cost
|
Estimated useful life
|
Estimated residual value at end of useful life
|
|
Building
|
(£) 60,000
|
(years) 50
|
(£) 10,000
|
|
Vehicle
|
12,000
|
10
|
300
|
|
Equipment
|
9,000
|
10
|
800
|
Buildings and equipment are to be depreciated using the straight line method, vehicles reducing balance of 25%.
The vehicle is sold for £6,500 on 1.12.X2 and an item of equipment costing £1,500 for £1,200 on the same date. Assume that the residual value of the item of equipment sold was estimated to be £100 at its date of purchase. Assume a full year's depreciation in the year of purchase and none in the year of sale.
Show the asset accounts, provision for depreciation accounts, sale of asset accounts and extracts from the income statement and balance sheet in respect of these assets for the years ended 31.12.X0, 31.12.X1, 31.12.X2.