Write a short commentary on each ledger account prepared in S1, to enable a nonaccountant to understand their purpose and content.

Data from S1

Prepare ledger accounts to report the transactions and events of questions C8.1 and C8.2.

C8.1

The Biscuit Manufacturing Company commenced business on 1 January Year 1 with capital of £22,000 contributed by the owner. It immediately paid cash for a biscuit machine costing £22,000. It was estimated to have a useful life of four years and at the end of that time was estimated to have a residual value of £2,000. During each year of operation of the machine, the company collected £40,000 in cash from sale of biscuits and paid £17,000 in cash for wages, ingredients and running costs.

C8.2

The biscuit machine in question C8.1 was sold at the end of Year 4 for a price of £3,000.