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Branson Ltd owns two delivery vehicles (each with a residual value of $6,000 and useful life of 4 years) and uses the straight-line method of
Branson Ltd owns two delivery vehicles (each with a residual value of $6,000 and useful life of 4 years) and uses the straight-line method of depreciation. The business closes its accounting records annually on 30 June. The following events and transactions occurred during the first 3 financial years. Ignore GST.
201617 | ||
July 1 | Purchased a delivery truck from Mangrove Mountain Motors for $74,500 cash plus stamp duty of $770, and registration and third-party insurance of $1,040. | |
June 1 | Made minor repairs to the truck for cash at a cost of $520. | |
June 30 | Recorded annual depreciation. | |
201718 | ||
July 1 | Purchased a delivery van from Northern Motors for cash, $56,000. This van was a used vehicle which was expected to last 4 years from the date of purchase. Fitted four new tyres to the van at a cash cost of $1,640. | |
June 30 | Recorded depreciation on both truck and van. | |
201819 | ||
July 1 | Paid $4,600 for an overhaul of the motor of the delivery truck. This expenditure is expected to extend the useful life by 1 year. The parts replaced in the truck were considered to have a carrying amount of $2,000. Installed a two-way radio in the delivery van at a cost of $2,100 to improve efficiency. This expenditure will not increase the useful life. | |
June 30 | Recorded depreciation on both truck and van. |
Prepare entries (in general journal form) to record the transactions of Branson Ltd as they relate to both vehicles to 30 June 2019.
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