Answered step by step
Verified Expert Solution
Question
1 Approved Answer
(i) Motor vehicles at cost 230,000 was purchased on 1 April 2017. Depreciation is provided at 15% p.a. on the straight-line basis. Depreciation is to
(i) Motor vehicles at cost 230,000 was purchased on 1 April 2017. Depreciation is provided at 15% p.a. on the straight-line basis. Depreciation is to be calculated on assets in existence at the end of each year, giving a full year's depreciation even though the asset was bought part of the way through the year. On 1 February 2019, one of the motor vehicles costing 57,000 was sold at a value of 36,000. REQUIRED: Prepare the following accounts for the year ended 31 March 2018 and 2019: a) Motor vehicles; b) Accumulated depreciation; and c) Disposal of motor vehicles account [14] (ii) Provide an example where it would be more appropriate to use the straight line method and another example where it would be more appropriate to use the reducing balance method. [6]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started