After completing the financial statements for the company as at 30 June 2017, Jon Snow has now asked for your assistance in producing an Asset Register for a car and calculating the profit or loss made on sale when it was the sold. Jon provides the following information:
• A new motor vehicle was purchased from Wangara Motors on 1 July 2014 for $35,000 plus GST of $3,500
• Asset number ZQT-127, registration number WAP-190, and the motor vehicle kept at the Welshpool Depot of Snow Manufacturing. The make/model is a Ford Focus CLX
• The motor vehicle depreciation rate is the straight line method over 5 years (20% per annum)
• The residual value is expected to be $5,000 plus GST of $500
• The motor vehicle was sold on 31 March 2017 for $10,000 plus GST of $1,000
Required:(a) Prepare and maintain an asset register for the motor vehicle from its purchase date until the sale date on 31 March 2017
(b) Prepare general journal entries to record the purchase of the motor vehicle and the depreciation for the years ended 30 June 2015 and 2016
(c) Prepare the general ledger entries for the sale of the motor vehicle
(d) Determine the profit or loss on disposal of the non current asset