Demolition plc purchases a machine for £15,000 on 1 January 20X1. After incurring transportation costs of £1,300 and spending £2,500 on installing the machine it breaks down and costs £600 to repair. Depreciation is charged at 10% per annum. At what carrying amount will the machine be shown in Demolition plc's statement of financial position at 31 December 20X1?

What is the reasoning behind charging depreciation in historical cost accounting?

Beta plc purchased plant and equipment on 1 July 20X1 for £40,000. The scrap value of the plant at the end of its ten-year useful life is £4,000. Beta plc's policy is to charge depreciation monthly on the straight-line basis. The journal entry to record the depreciation charge on the plant in Beta's statement of profit or loss for the reporting period of 12 months ending 30 September 20X1 should be:

Cataract plc purchases a machine for which the supplier's list price is £28,000. Cataract plc pays £23,000 in cash and trades in an old machine, which has a carrying amount of £8,000. It is the company's policy to depreciate machines at the rate of 10% per annum on cost. What is the carrying amount of the machine after one year?

Derek plc purchased a van on 1 October 20X0 for a total cost of £22,000 by paying £17,500 cash and trading in an old van. The old van had cost £20,000 and the related accumulated depreciation was £14,200. The loss on disposal of the old van in Derek plc's statement of profit or loss for the year ended 31 December 20X0 is:

Your firm bought a machine for £5,000 on 1 January 20X1, when it had a useful life of four years and a residual value of £1,000. Straight-line depreciation is to be applied on a monthly basis. On 31 December 20X3, the machine was sold for £1,600. The amount to be entered in the 20X3 statement of profit or loss for profit or loss on disposal is:

Stripes plc purchased new machinery on 1 August 20X4 for £38,000. The scrap value of the machinery at the end of its six-year useful life has been assessed as £2,000. Stripes plc's policy is to calculate depreciation monthly on the straight-line basis. The depreciation charge in Stripes plc's statement of profit or loss for year ended 31 March 20X5 should be:

A company purchased a car for £18,000 on 1 January 20X0. The car was traded in on 1 January 20X2. The new car has a list price of £30,000 and the garage offered a part-exchange allowance of £5,000. The company provides depreciation on cars using the reducing balance method at a rate of 25% per annum. What loss on disposal will be recognised in the statement of profit or loss for the year ended 31 December 20X2?

On 1 January 20X4 Joffa plc purchased a new machine at a cost of £96,720. Delivery costs were £3,660 and internal administration costs of £9,450 were incurred. At that time Joffa plc planned to replace the machine in five years, when it would have no value, and to depreciate the machine on a straight-line basis. Joffa plc decides on 1 January 20X6 that the machine only has one remaining year of useful life. There is no change to the residual value at the end of its life.
How much depreciation will be charged in respect of this machine in Joffa plc's statement of profit or loss for the year ended 31 December 20X6?

Gilbert plc acquired a new truck on 1 July 20X4 for £99,900 including VAT at 20%. The company depreciates all vehicles straight-line at 20% per annum on a monthly basis.
What is the carrying amount of Gilbert plc's truck at 31 December 20X4?

A company buys a machine on 31 August 20X0 for £22,000. It has a useful life of seven years and a residual value of £1,000. On 30 June 20X4 the machine is sold for £9,000 cash which has been recorded correctly in the cash at bank account, however a suspense account was opened to record the other side of the transaction. The company's accounting policy is to charge depreciation monthly using the straight-line method, with depreciation charged in the month of purchase but not the month of disposal.
What journal entry is required to correctly record the disposal of the machine and to remove the suspense account?

Exe plc, which has a year end of 31 December, purchased a machine on 1 January 20X1 for £35,000. It was depreciated at 40% per annum on the reducing balance basis. On 1 January 20X4 Exe plc part-exchanged this machine for a more advanced model. It paid £30,000 and realised a profit on disposal of £2,440.
The price of the new machine was:

On 1 June 20X3 Spam plc purchased some plant at a price of £43,000. It cost £1,500 to transport the plant to Spam plc's premises and set it up, plus £900 for a licence to operate it. The plant had a useful life of eight years and a residual value of £3,500. On 1 June 20X5 the directors of Spam plc decided to change the depreciation method to reducing balance, at 40%.
What is the carrying amount of Spam plc's machine in its statement of financial position at 31 May 20X6?

Whipper has a machine which cost £40,000 and has a carrying amount of £32,000 on 1 April 20X7. It is being depreciated at 20% per annum on the reducing balance basis. On 31 March 20X8, Whipper performed an impairment review and determined that the fair value less disposal costs of the machine was £22,400 and the value in use was £21,000. What is the impairment loss in respect of the machine at 31 March 20X8?

Morse plc has the following note to its statement of financial position relating to plant and machinery as at 31 May.
| | 20X7 (£) | 20X6 (£) |
| :------------------ | :------- | :------- |
| Cost | 110,000 | 92,000 |
| Accumulated dep. | 72,000 | 51,000 |
| Carrying amount | 38,000 | 41,000 |
During the year to 31 May 20X7, the following transactions occurred in relation to plant and machinery:
Additions: £39,000
Loss on disposals: £2,000
Depreciation charge: £27,000
What were the proceeds from disposals of plant and machinery received by Morse plc in the year to 31 May 20X7?