Page 372 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 24

Example 4

Accounting for depreciation

Using information from Example 3, Barney has decided to apply the straight-
line method of depreciation to the item of plant.

Required:

Show the relevant ledger account entries for each of the years ended
31 December 20X3 and 20X4 to record the initial cost of the asset, along
with accounting for the annual depreciation charge.

Solution

Plant and equipment – cost
Date Details $ Date Details $

1.1.X3 Cash paid 103,000 31.12.X3 Bal c/d 103,000
–––––– ––––––

1.1.X4 Bal b/d 103,000 31.12.X4 Bal c/d 103,000
–––––– ––––––

1.1.X5 Bal b/d 103,000

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