Question

Falcon ltd whose year end is 31 December acquired four identical units of equipment at a cost of Sh. 600,000 each on 1 April, 2012. The useful life for each piece of the equipment is four years after which it is expected to have a salvage value of sh. 100,000. A similar piece of equipment was acquired on 1 June 2013 at a cost of sh. 700,000. The useful life was estimated at four years and the salvage value sh. 150,000. One unit acquired on 1 April, 2012 was sold for sh. 200,000 on 1 August 2014. On 1 October, 2014 another piece of equipment was acquired 800,000. The estimated useful life was four years and salvage value sh. 200,000. On 1 September, 2015 one unit acquired on 1 April, 2012 was sold at sh. 250,000. The company’s policy is to provide for full years depreciation in the year of purchase and no depreciation in the year of disposal.

Required:
Show the Equipment and Accumulated Depreciation – Equipment accounts for the years 2012 to 2015.

Answer 1