Reference no: EM132591795

Gawucho Furniture Manufacturing Company (Gawucho) commenced business on 1st January, 2019, preparing account to 31st December each year. The accountant of the business has provided you with the below information.

Assets                                             Note                      Original Cost (GH¢)

Furniture                                       1                       424,000

Plywood                                        2                        130,000

Motor Vehicle                                 3                        350,000

Plant and Machinery                       4                          100,000

Total Assets                                                             1,004,000

Additional Information

1. The Furniture was produced on 1st March, 2019 for sales but Gawucho used GH¢ 20,000 of these Furniture in its Administration offices. No sales were made during the year.

2. Plywood was purchased on 1st January, 2019 for the production of the furniture.

3. Motor Vehicle was acquired on 1st January, 2019 to convey furniture to customers' destination only.

4. Plant and machinery was bought on 1st October, 2019 for production of furniture.

5. The business depreciates its asset at the rate of 20% on straight line method on one month ownership basis.

6. All the above assets existed as of 31st December, 2019.

Required

Question a. Draft an extract showing how the above transactions should be presented in the financial statements of Gawucho Furniture Manufacturing Company at the end of 2019 year.

Question b. Provide notes to support your presentation