Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In what ways can non-current assets be disposed? What do you understand by the trade in disposal? Trust in him Enterprise has the following tasks

  1. In what ways can non-current assets be disposed?
  2. What do you understand by the trade in disposal?
  3. Trust in him Enterprise has the following tasks at 1st April, 2017.

NO.

TRUCK NUMBER

DATE ACQUIRED

COST OF VEHICLE

GH

ESTIMATE RESIDUAL VALUE

GH

ESTIMATED USEFUL LIFE

1

GT 124516

1st October, 2016

42,500.00

12,500.00

Five (5) years

NO.

TRUCK NUMBER

DATE ACQUIRED

COST OF VEHICLE

GH

ESTIMATE RESIDUAL VALUE

GH

ESTIMATED USEFUL LIFE

2.

GT 346717

1st April, 2017

60,000.00

10,000.00

Eight (8) years

Note: Estimated Residual value (ERV)

The company policy is to provide at the end of each financial year a change for depreciation using the straight line method, applied on month by month basis.

During the financial year ended 31st March, 2017, the following occurred:

  1. On 30th June, vehicle No. GT 124516 was traded in and replaced by GE 147817 the trade in allowance was GH 25,000.00.

GE 147817 Cost GH75,000.00 and the balance due that is after deducting the trade in allowance was paid partly in cash and partly by a loan of GH30,000.00 from Port Base Financial Service.

The GE 147817 estimate to have a residual value of GH20,000.00 after an estimated economic life for five (5) years.

The estimated remaining economic life of vehicle No.2 GT 346717 was reduced from six (6) years to four (4) years with no change with the estimated residual value.

You are require to:

  1. Show the journal entries to record the above transaction which occurred during the financial year ended 31st March, 2018

  1. Journal entry to record the depreciation of trucks for the year ended 31st March, 2018.

  1. Trucks account and provision for the depreciation account for the year ended 31st March, 2018.

  1. Show the necessary calculation clearly in the books
  2. Post the items in their relevant ledgers.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Lease Audits The Essential Guide

Authors: Theodore H Hellmuth

1st Edition

0934055041, 978-0934055048

More Books

Students also viewed these Accounting questions

Question

Design a health and safety policy.

Answered: 1 week ago