{m}.{s}.1Example set 1

For the business we have previously looked at let us now consider an item of machinery sold in 2009. Machinery details are:

Item 1 Purchased 2006 £3,200 (net of VAT).
Item 2 Purchased 2007 £1,600 (net of VAT).

Depreciation: 10% straight line.

The T accounts will show the figures brought forward in 2009.

(cost = £4,800; accumulated depreciation = 3,200 x 10% x 3 + £1,600 x 10% x 2 = £1,280)

You will then be asked to complete the entries in 2009 when Item 1 was sold.

Machinery (cogs)
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