An item of equipment bought in November 1999 for Shs.105,000 is now recognised to have a...

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An item of equipment bought in November 1999 for Shs.105,000 is now recognised to have a useful life of at least 20 years. b) A vehicle bought in June 2011 for Sh.85,000 was traded in at a value of Sh.44,000 in part exchange for a new vehicle costing Shs.140,000. Required: a) Prepare a schedule of fixed assets movements and balances suitable for inclusion in the company's published accounts for the year to 30th September, 2014. Show clearly the amount to be charged against the year's profits and the balances to be shown in the balance sheet. Explain why: i) ii) it is considered necessary to provide for depreciation; some business enterprises do not provide depreciation on freehold land and buildings. (20 marks) An item of equipment bought in November 1999 for Shs.105,000 is now recognised to have a useful life of at least 20 years. b) A vehicle bought in June 2011 for Sh.85,000 was traded in at a value of Sh.44,000 in part exchange for a new vehicle costing Shs.140,000. Required: a) Prepare a schedule of fixed assets movements and balances suitable for inclusion in the company's published accounts for the year to 30th September, 2014. Show clearly the amount to be charged against the year's profits and the balances to be shown in the balance sheet. Explain why: i) ii) it is considered necessary to provide for depreciation; some business enterprises do not provide depreciation on freehold land and buildings. (20 marks)

Answer rating: 100% (QA)

a Date Particulars Dr Cr 300999 Dr Cash CrBank Shs105000 Shs105000 300999 DrCash DrCash Cr Expense C... View the full answer