Details of courier vehicles owned by Speedy Couriers at 1 July 2018 are as follows: This business is registered for GST.

 

Required:

1. Record the following transactions for Speedy Couriers for the year ending 30 June 2018 in the general journal. Narrations are not required.

1 July 2018:	The owners of Speedy Couriers decided to re-value the Van to a fair value of $50,000.
30 December 2018:	The courier van was exchanged for a new truck with a cash price of $64,000. A trade-in allowance of $27,000 was received for the courier van. The balance outstanding was paid in cash.
30 June 2019:	The mini-van was overhauled at a cost of $25,000 (excluding GST) after which the useful life was estimated to be 6 years. There was no change to the residual value of the vehicle. The overhaul costs were paid in cash. The carrying value of parts replaced was $3,000.

(4 + 7 + 6 = 17 marks)

2. Record the depreciation expense of the year ending 30 June 2020 for the mini-van in the general journal. Narrations are not required.

Cost Accumulated Useful life Residual Depreciation depreciation value method Courier 80,000 42,000 8 years 10,000 Straight-line van Van 60,000 18,000 6 years 6,000 Straight-line Mini-van 55,000 25,000 10 years 5,000 Straight-line