Reference no: EM132568655

Question - A company depreciates its plant at the rate of 20 per cent per annum, straight line method, for each month of ownership. From the following details draw up the plant account and the provision for depreciation account for each of the years 1999, 2000, 2001 and 2002.

1999 Bought plant costing £900 on 1 January.

Bought plant costing £600 on 1 October.

2001 Bought plant costing £550 on 1 July.

2002 Sold plant which had been bought for £900 on 1 January 1999 for the sum of £275 on 30 September 2002.

Required - You are also required to draw up the plant disposal account and the extracts from the balance sheet as at the end of each year.