ACCA F3 Mock Exam Plant Account
The plant and machinery account (at cost) of a business for the year ended 31 December 2005 was as follows:
| Plant & Machinery Cost | |||
| 2005 | 2005 | ||
| 1 Jun Balance | 700,000 | 31 March Transfer Disposal Account | 30,000 |
| 30 June Cash Purchase of plant | 600,000 | 31 Dec Balance | 1,270,000 |
| Total | 1,300,000 | Total | 1,300,000 |
The company’s policy is to charge depreciation at 20% per year on the straight line basis, with proportionate depreciation in the years of purchase and disposal.
What should be the depreciation charge for the year ended 31 December 2005?
Suggested Solution:
| Jun Balance | 700,000 | |||
| March Disposal | 30,000 | 3/12 | 20% | 1,500 |
| Remaining Assets | 670000 | 12/12 | 20% | 134,000 |
| Purchase | 600,000 | 6/12 | 20% | 60,000 |
| Total | 195,500 |
To do the same topic again in ACCA F3 Mock Exam Plant Account