Chapter 20 Accounting want working out

Problem Depreciation and overhauls 20.9 Rawsons' Recycling Lid commenced business on 31 March 2015 in the recycling industry. The company balances its accounting records at month-end and the end of its reporting period is 31 December. Ignore GST. The following events occurred during 2015 and 2016: 2015 April 1 Paid $140 000 cash for a second-hand disposal truck. Paid $1500 cash to recondition the truck's engine. June 30 Paid $12 000 cash for equipment. The company estimated the equipment's useful life at 10 years and residual value at Aug. 31 $1500. Paid $600 cash for the truck's transmission repairs and oil Dec. 31 change. Recorded depreciation on the truck at 40% p.a. on the diminishing balance, and on the equipment using the straight- line method. 2016 Mar. 13 Paid $600 cash to replace a damaged bumper bar on the July 1 truck. Installed a new motor in the truck for a cost of $11 000. The company considered that the carrying amount of the old motor was only $600 at this date, and the old motor was written off. With the new motor installed, the truck's depreciation rate Dec. 31 using the diminishing-balance method was revised to 30% from 1 July. Recorded depreciation on the truck and on the equipment. Required A. Prepare journal entries to record the events. B. Prepare the following ledger accounts for the period 31 March 2015 to 31 December 2016. Truck Equipment Accumulated depreciation - truck Accumulated depreciation - equipment