FIN621 Financial Statement Analysis Assignment No.2 Solution Spring Semester 2013

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FIN621 Financial Statement Analysis Assignment No.2 Solution Spring Semester 2013


Assignment Question:
A company purchased a second hand machine purchased a second hand machine on 1st January 2008 for Rs. 37,000 and immediately spent Rs. 2,000 on its repair and Rs. 1,000 on its erection.
On 1st July, 2009 it purchased another machine for Rs. 10,000 and on 1st July 2010 it sold off the first machine for Rs. 28,000 and bought another machine for Rs. 25,000.

On 1st July 2011 the second machine was also sold off for Rs. 2,000.
Depreciation was provided on machinery @ 10% p.a. on the original cost annually on 31st December. In 2009, however, the company changed the method of providing depreciation and adopted written down value method, rate of depreciation being 15% p.a.

Requirement:
Give the machinery account for four years commenting from the acquisition of first machine.