Question
Details of courier vehicles owned by Speedy Couriers at 1 July 2018 are as follows: This business is registered for GST. Cost Accumulated depreciation Useful
Details of courier vehicles owned by Speedy Couriers at 1 July 2018 are as follows: This business is registered for GST.
| Cost | Accumulated depreciation | Useful life | Residual value | Depreciation method |
Courier van | 80,000 | 42,000 | 8 years | 10,000 | Straight-line |
Van | 60,000 | 18,000 | 6 years | 6,000 | Straight-line |
Mini-van | 55,000 | 25,000 | 10 years | 5,000 | Straight-line |
Required:
- 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)
- Record the depreciation expense of the year ending 30 June 2020 for the mini-van in the general journal. Narrations are not required.
(3 marks)
(Total: 17 + 3 = 20 marks)
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