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
Machine No. 1
Machine No. 2
Machine No. 3
Machine No. 4

Cost
GH
200,000
350,000
400,000
540,000

Date of purchase
01/01/12
30/06/12
01/01/13
01/12/13

Date of disposal
01/10/14
30/06/14

Additional information:
i.
ii.
iii.
iv.

It is the policy of the company to charge a full years depreciation on machinery all assets
in use by the end of the financial year.
Machine 1 and 3 are depreciated at 20% on reducing balance while machine 2 and 4 are
10% on straight line basis.
Accounts are prepared to December 31st each year.
Machine 1 and 2 were sold for GH150,000 and GH250,000 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
900,000
Motor vehicles at cost
780,000
Provision for depreciation:
Plant and machinery
50,000
Motor vehicles
30,000

Donkor & Appiagyei

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 GH20,000 each and a plant for GH50,000
ii.
On 1st April 2002, one saloon car at GH10,000 and four machines GH12,000
each.
On 30th June, 2002 two machines purchased on 1st January, 1999 at GH9,000 were sold for
GH4,500 and GH5,500. On the same date, one saloon car purchased on 1st July, 1999 for
GH15,000 was auctioned for GH11,000. 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.
ii.
iii.

Plant and machinery and Motor vehicles.

Provision for depreciation of plant and machinery and motor vehicles
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
Plant and Machinery

Cost
GH000
200,000

Net Book Value

GH000
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.
ii.

Plant which cost GH35,000,000 and had been used for four years was sold for
GH24,000,000.
A new plant costing GH40,000,000 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.

Donkor & Appiagyei