Red Onion's opening non-current asset register details on 1 January 20X0 included the following:
Description Opening cost Opening accumulated depreciation
Main Buildings 100,000 20,000
Van 30,000 18,000
Equipment and plant 48,000 21,000
During the year to 31 December 20X0 the following transactions took place:
(1) Carried out major repairs to some equipment on 1 July costing £30,000. This included a new engine costing £10,000 which increased efficiency of the equipment by 200%.
(2) Installed office equipment in its office building on 28 June at a cost of £23,000.
(3) Sold equipment on 1 May for £4,000. It had originally been purchased on 1 January 20W6 for £11,200.
(4) Sold a van on 31 August for £6,800 which had been purchased on 1 August 20W7 for £18,800 including £200 road tax, and £600 warranty against mechanical defects for three years.
(5) Purchased a van on 1 August for £20,000 including £1,000 delivery, £200 road tax and £800 extended warranty against mechanical defects for three years.
(6) Purchased a new machine on 1 February at a cost of £15,000.
(7) Replaced the flat roof on the building with a pitched roof costing £20,000.
(8) On 1 December Bright Red purchases a office computer for £10,000. It is expected to last for 3 years and have a salvage value of £2,000.
The company provides a full year's depreciation on non-current assets held at the end of each year using the following methods and rates:
Building 5% per annum, straight line
Motor vehicles 25% per annum, reducing balance
Plant and equipment 20% per annum, straight line
Computer Sum of digits method
Required
(a) Record all the transactions numbered (1) to (8) above in the ledger accounts ( T account) of Red Onino and provide depreciation as appropriate for the year ended 31 December 20X0; and
(b) Show an extract from the income statement for the year ended 31 December 20X0 of the above transactions.