skylark Enterprises Ltd (‘Skylark Enterprises’), a manufacturing firm, has a fiscal yearend of 31 December. The company utilizes the straight-line method of depreciation and has adopted a residual value of 10% for all its assets. The estimated useful life for their machinery is 10 years.

The following transactions occurred during the 2023 year: 1. 2 January 2023: Skylark Enterprises purchased machinery worth R500 000. This cost does not include installation and transportation costs, which amounted to R20 000. The machine was ready for use as of 2 January 2023.

2. 1 July 2023: Skylark Enterprises sold one of its old machines that had been purchased on 1 January 2018. The machine had a cost of R180 000, and it was sold for R60 000. The company recorded a loss on the disposal. The cash payment was received on the same day.

3. 1 November 2023: Skylark Enterprises purchased another machine for R400 000. However, it was only available for use from 1 December 2023.

The company's ledger showed the following balances at 1 January 2023:

Description Amount (R)

Machinery – Cost 800 000

Accumulated Depreciation – Machinery 200 000

9 HFAC130-1-Jul-Dec2023-SA1-LVN-20230821-V2

REQUIRED:

Prepare the general ledger accounts for the year ended 31 December 2023 of

Machinery Cost and Accumulated Depreciation of Machinery

Instructions:

• You must close off / carry forward the account at year-end.

• Show workings and reference your workings for calculations.

 

Answer rating: 100% (QA)

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