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QUESTION 4 Nicely Made used machines manufactured in Germany to manufacture wood toys. On 1 March 2018 the old machine that has broken down was sold for R40 000 cash. The original cost price of this machine was R150 000 and the accumulated depreciation amounted to R90 000 on 1 June 2017, the beginning of the current financial year. On the same date, 1 March 2018, Nicely Made purchased a new machine at a cost of R250 000 and paid cash for it. Depreciation on plant and machinery must be provided at 10% per annum on the reducing balance method REQUIRED Marks Prepare the following general ledger accounts (properly closed off in the general ledger of Nicely Made at 31 May 2018 (i) Asset realisation (ii) Plant and machinery ii) Accumulated depreciation: Plant and machinery Please note The contra accounts in the leger accounts must be correctly referred to. All calculations must be shown Your answer must comply with the requirements of Intemational Financial Reporting Standards (IFRS to the business of the sole trader

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Plant and Machiner Date Date 1/6/2017Balance b/d 1/3/2018 Cash 150,0001/3/2018 Asset Realisation 250,00031/5/2018 Balance c/d 400,000 150,000 250,000 400,000 Asset Realisation Date $Date 1/3/2018 Plant and Machinery 150,000 1/3/2018 Accumulated Depreciation 94,500 Plant and Machinery 1/3/2018 Cash 1/3/2018 Income Statement [Loss] 40,000 15,500 150,000 150,000 Accumulated Depreciation: Plant and Machine Date $ Date 90,000 4,500 6,250 100,750 1/3/2018 Asset Realisation 94,500 1/6/2017 Balance b/d 1/3/2018 Income Statement [Note 1] 6,25031/5/2018 Income Statement [Note 2] Balance c/d 100,750 Notes:- (1) Depreciation of disposed asset till 01/03/2018 150,000 90,000 60,000 6,000 4,500 Cost of asset Less: Accumulated Depreciation 1090 Depreciation for a year (60,000 X 10%) Depreciation till the date of disposal (6,000 X 9/12) (2) Depreciation for the current yeair Cost of Asset 1090 Depreciation for a year (250,000 X 10%) Depreciation for the current year (25000 X 3/12) 250,000 25,000 6,250

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