Makers and Co. is a partnership with a small factory on the outskirts of London. They decide to erect an extension to their factory.
The following items appear in the trial balance of the firm, as at 31 December 20X2:

In the course of your examination of the books you ascertain that:
1. Building materials used in building the extension and costing £1,800 had been charged to the purchases account;
2. Wages paid to men engaged in building the extension amounted to £1,500 and had been charged to the wages account;
3. The hire charge was in respect of machinery used exclusively in the construction of the extension;
4. The legal charges, apart from £50 relating to debt collecting, were incurred in the purchase of the land.
It is decided that depreciation on plant and machinery is to be provided at per cent on the closing book value.
Required
a. Write up the following ledger accounts: Factory extensions, freehold premises, plant and machinery, and provision for depreciation of plant and machinery.
b. Show the particulars that should appear on the firm's statement of financial position at 31 December 20X2.

Transcribed Image Text:

Debir Credit Purchases Wages Hire of mochinery Plant and mochinery ot coe to 31 Deceber 203 Plant and machinery purchased during the year Plant and machinery sold duning the year cost in 20W4 £900 12,800 16,400 520 5,900 2,540 160 depreciation to 31 December 20K1 e540) freehold premises at cost to 31 December 20xI (Land E3.000: 7,000 Buidings £4,000) Freehold lard purchased during the year for a factory extersion Provision for depreciation of plant and machinery at 31 December 20X1 legol chorges 2,800 2.4C0 280