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Donkor & Appiagyei 1

UNIVERSITY OF GHANA BUSINESS SCHOOL

DEPARTMENT OF ACCOUNTING

UGBS 205: FUNDAMENTALS OF ACCOUNTING METHODS

WORKSHEET 4

Q1.

The data below was extracted from the books of Apiirigu Enterprise:

 Non-Current Assets Cost Date of purchase Date of disposal

GH₵ Machine No. 1 200,000 01/01/12 01/10/14

Machine No. 2 350,000 30/06/12 30/06/14

Machine No. 3 400,000 01/01/13

Machine No. 4 540,000 01/12/13

Additional information:

i.  It is the policy of the company to charge a full year’s depreciation on machinery all assets

in use by the end of the financial year.

ii.  Machine 1 and 3 are depreciated at 20% on reducing balance while machine 2 and 4 are

10% on straight line basis.

iii.  Accounts are prepared to December 31st each year.

iv.  Machine 1 and 2 were sold for GH₵150,000 and GH₵250,000 respectively.

You are required to:

i.  Show the relevant entries to record these transactions for the relevant years.

Q2.

The following information relates to Chakadamus Ltd:

a)  On 1st January, 2002 balances brought forward in respect of non-current assets were:

GH₵ Plant and machinery at cost 900,000Motor vehicles at cost 780,000

Provision for depreciation:

Plant and machinery 50,000Motor vehicles 30,000

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Donkor & Appiagyei 2

 b)  During the six months period ending 30th June 2002, the following additional non-current

assets were acquired by cheque:

i.  On 31st March 2002 two cargo GH₵20,000 each and a plant for GH₵50,000 

ii.  On 1st April 2002, one saloon car at GH₵10,000 and four machines GH₵12,000

each.

On 30th  June, 2002 two machines purchased on 1st  January, 1999 at GH₵9,000 were sold for

GH₵4,500 and GH₵5,500. On the same date, one saloon car purchased on 1 st  July, 1999 for

GH₵15,000 was auctioned for GH₵11,000. It is the policy of the business to depreciate motor

vehicles and plant and machinery at 10% and 5% per annum respectively on straight line method

and on one month ownership basis.

You are required to write up the following accounts to 30th June, 2002:

i.  Plant and machinery and Motor vehicles.

ii.  Provision for depreciation of plant and machinery and motor vehicles

iii. 

Disposal of plant and machinery and motor vehicles.

Q3.

An extract from the statement of financial position of Senior Fredizzo Ltd. as at 31st December

2008 is given below:

Asset Cost Net Book ValueGH₵’000  GH₵’000 

Plant and Machinery 200,000 125,583

Additional information:

It is the policy of the business to provide for depreciation at the rate of 10% per annum on reducing

 balance basis. Annual depreciation is calculated on asset in use at the end of the year. The

following transactions took place in 2009:

i.  Plant which cost GH₵35,000,000 and had been used for four years was sold for

GH₵24,000,000. 

ii. 

A new plant costing GH₵40,000,000 was acquired on 1st

 January, 2009.

You are required to prepare:

a)  Plant and machinery account.

 b)  Provision for depreciation account for the year ended 31st December, 2009 and 2010

c)  Plant and machinery disposal account.