Prepare the non-current assets note

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Reference no: EM133105752

Question - Nelly owns a business which has a financial year end of 31 December 2021. The table below includes the account balances of the business.

Balance sheet accounts

Dr

Cr

 

£

£

Property and equipment at cost (at 31/12/2020)

275,000


Property and equipment - accumulated depreciation (at 31/12/2020)


55,000

Motor vehicles at cost (at 31/12/2020)

30,000


Motor vehicles - accumulated depreciation (at 31/12/2020)


10,800

Receivables (at 31/12/2021)

412,800


Allowance for receivables (at 31/12/2020)


24,000

The following information is relevant:

1. Depreciation on property and equipment is provided at 20% per annum on the straight-line basis, assuming no residual value.

2. Motor vehicles are depreciated at 20% per annum using the reducing balance method.

3. There were no additions and disposals of non-current assets during the year.

4. Nelly estimates that £43,800 due from customers will be irrecoverable and must be written off.

5. The allowance for receivables is to be set at 8% of net receivables at 31 December 2021.

Required - Prepare the non-current assets note using the layout as shown in the table below. Show your workings.

Reference no: EM133105752

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