The year-end Trial Balance extracted from the books of a business owned by Guy Morris included the ledger balances listed on the right. A third of the property cost relates to land which is not depreciated. A machine was acquired for £400,000 on 1 July 2011; while a vehicle that cost £128,000 on 1 April 2010 was sold on 30 September for £40,000 and the amount credited to the Motor vehicles account. Guy depreciates his assets at the rates shown below:

Required:

(a) Show how the information in respect of the three classes of assets will be reported in the Statement of movement of assets of the year ended 30 September 2011 and

(b) identify the gain or loss on disposal of the vehicle in the year.

Transcribed Image Text:

Class of asset Method Building Machinery Motor vehicle Straight-line Straight-line Reducing balance Annual rate 2% 5% 25%